AI is dimming job prospects for less-experienced workers, according to a first-of-its-kind Stanford study.
Why it matters: There's been significant anecdotal evidence of an AI-related slowdown in hiring for certain jobs, but new data shows a real and measurable impact for entry-level workers.
Driving the news: Using ADP payroll data, Stanford researchers found that employment for younger workers (ages 22–25) in AI-impacted jobs — like software development and customer support — has dropped by 16% since late 2022.
- "There's definitely evidence that AI is beginning to have a big effect," economist and Stanford professor Erik Brynjolfsson told Axios.
- What's notable is the speed with which the job impact has gone from theoretical to real and significant. "This is the fastest, broadest change that I've seen," he said, noting the only comparable shift was the one to remote work amid the COVID-19 pandemic.
Yes, but: Older workers and those in other fields aren't seeing a measurable hit to job prospects.
- Brynjolfsson said that the disparate impact may stem from the fact that AI, like recent college graduates, has more book knowledge than on-the-job experience.
- "More senior workers have more tacit knowledge, they learn tricks of the trade that maybe never get written down," he said. "Those are not the things that the AI has been able to learn, at least not yet."
The big picture: Even if demand is steady or rising for more experienced workers, industries will struggle to find the next generation of experienced workers if people can't get a first job in the field.
- "We're going to have to think about how the labor market adjusts so that everyone gets a chance to be working their way up the career ladder," he said.
- Businesses are still struggling to get across-the-board gains from AI, with most benefits concentrated in a few job categories, such as coding and customer service.
Between the lines: When Brynjolfsson and his colleagues first looked at the data in aggregate, it didn't appear that AI was having a large overall impact on jobs. But once they started looking at specific job types and experience, the impact became clear.
- The team also tried to rule out other causes, such as changes to remote work policies and the cyclical nature of the tech industry. "You can't know for sure, but it does look like AI is behind these big changes."
- Brynjolfsson said that there is also a big difference in job impact based on how companies deploy AI.
- Those who seek to use the technology to augment their human workforce are hiring more, while those who view AI as a replacement for human workers, not surprisingly, are hiring less.
What we're watching: One of the key unknowns is whether AI will continue to predominantly affect entry-level jobs or if higher-skilled workers are also at risk as the technology improves.
- "That's the multitrillion-dollar question," Brynjolfsson said.
- Younger workers may be simply the first wave to be impacted, with more people losing jobs as the technology improves. "It's certainly plausible that what we're seeing is just the canary in the coal mine," he said.
- Brynjolfsson said he and his colleagues are creating an "AI economic dashboard" that offers hiring and wage data on a near-real-time basis so workers and employers know where to focus their training efforts.