Key Findings
We introduce a new measure of AI displacement risk, observed exposure, that combines theoretical LLM capability and real-world usage data, weighting automated (rather than augmentative) and work-related uses more heavily
AI is far from reaching its theoretical capability: actual coverage remains a fraction of what's feasible
Occupations with higher observed exposure are projected by the BLS to grow less through 2034
Workers in the most exposed professions are more likely to be older, female, more educated, and higher-paid
We find no systematic increase in unemployment for highly exposed workers since late 2022, though we find suggestive evidence that hiring of younger workers has slowed in exposed occupations
Introduction
The rapid diffusion of AI is generating a wave of research measuring and forecasting its impacts on labor markets. But the track record of past approaches gives reason for humility.
For example, a prominent attempt to measure job offshorability identified roughly a quarter of US jobs as vulnerable, but a decade on, most of those jobs maintained healthy employment growth. The government’s own occupational growth forecasts, while directionally correct, have added little predictive value beyond linear extrapolation of past trends. Even in hindsight, the impact of major economic disruptions on the labor market is often unclear. Studies on the employment effects of industrial robots reach opposing conclusions, and the scale of job losses attributed to the China trade shock continues to be debated.1
In this paper, we present a new framework for understanding AI’s labor market impacts, and test it against early data, finding limited evidence that AI has affected employment to date. Our goal is to establish an approach for measuring how AI is affecting employment, and to revisit these analyses periodically. This approach won't capture every channel through which AI could reshape the labor market, but by laying this groundwork now, before meaningful effects have emerged, we hope future findings will more reliably identify economic disruption than post-hoc analyses.
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