Technology and Labor Markets: Past, Present, and Future; Evidence from Two Centuries of Innovation

We use recent advances in natural language processing and large language models to construct novel measures of technology exposure for workers that span almost two centuries. Combining our measures with Census data on occupation employment, we show that technological progress over the 20th century has led to economically meaningful shifts in labor demand across occupations: it has consistently increased demand for occupations with higher education requirements, occupations that pay higher wages, and occupations with a greater fraction of female workers. Using these insights and a calibrated model, we then explore different scenarios for how advances in artificial intelligence (AI) are likely to impact employment trends in the medium run. The model predicts a reversal of past trends, with AI favoring occupations that are lower-educated, lower-paid, and more male-dominated.