The NBER working paper (33777) 'Large Language Models, Small Labor Market Effects' by Anders Humlum and Emilie Vestergaard comments
We examine the labor market effects of AI chatbots using two large-scale adoption surveys (late 2023 and 2024) covering 11 exposed occupations (25,000 workers, 7,000 workplaces), linked to matched employer-employee data in Denmark. AI chatbots are now widespread—most employers encourage their use, many deploy in-house models, and training initiatives are common. These firm-led investments boost adoption, narrow demographic gaps in take-up, enhance workplace utility, and create new job tasks. Yet, despite substantial investments, economic impacts remain minimal. Using difference-in-differences and employer policies as quasi-experimental variation, we estimate precise zeros: AI chatbots have had no significant impact on earnings or recorded hours in any occupation, with confidence intervals ruling out effects larger than 1%. Modest productivity gains (average time savings of 3%), combined with weak wage pass-through, help explain these limited labor market effects. Our findings challenge narratives of imminent labor market transformation due to Generative AI. ...
the broader labor market implications of Generative AI remain unclear for at least three reasons. First, while workers have embraced AI chatbots for their low costs and ease of use, we lack evidence on whether firms are making meaningful investments in integrating these tools into workplace processes (Bonney et al., 2024). Second, RCTs show that the effects of AI chatbots can turn negative if applied to the wrong tasks (Dell’Acqua et al., 2023; Otis et al., 2024b), raising caution in extrapolating effects from controlled settings to the broader economy. Third, while studies have documented effects on productivity, it remains unclear how these translate into earnings and hours, as high-quality microdata on such outcomes is rarely available. ...
Despite rapid adoption and substantial investments by both workers and firms, our key finding is that AI chatbots have had minimal impact on productivity and labor market outcomes to date. Moreover, we find no evidence of differential trends over time, suggesting that the limited effects are not merely a very short-run phenomenon. In this sense, our results echo Robert Solow’s famous observation about the IT revolution: “You can see the computer age everywhere but in the productivity statistics” (Solow, 1987).