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Abstract This paper examines the impact of new technologies, particularly automation and artificial intelligence (AI), on labor markets. The existing literature documents ambiguous and only limited overall employment effects, while new technologies induce significant shifts in workforce composition. The implied firm-level productivity gains primarily benefit larger, skilled-labor-intensive firms. AI adoption remains limited but continues to reshape skill demands. The implied worker reallocation is costly, exacerbating inequality. This calls for policies such as targeted support for displaced workers, investment in education and skill development, promoting technology diffusion, and encouraging complementary human capital investments.
Rademakers et al. (Mon,) studied this question.