NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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AI and Jobs: the role of demand

James Bessen

NBER Working Paper No. 24235
Issued in January 2018
NBER Program(s):The Productivity, Innovation, and Entrepreneurship Program

Artificial intelligence (AI) technologies will automate many jobs, but the effect on employment is not obvious. In manufacturing, technology has sharply reduced jobs in recent decades. But before that, for over a century, employment grew, even in industries experiencing rapid technological change. What changed? Demand was highly elastic at first and then became inelastic. The effect of artificial intelligence on jobs will similarly depend critically on the nature of demand. This paper presents a simple model of demand that accurately predicts the rise and fall of employment in the textile, steel and automotive industries. This model provides a useful framework for exploring how AI is likely to affect jobs over the next 10 or 20 years.

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Document Object Identifier (DOI): 10.3386/w24235

Published: Artificial Intelligence and Jobs: The Role of Demand, James Bessen. in The Economics of Artificial Intelligence: An Agenda, Agrawal, Gans, and Goldfarb. 2019

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