Artificial intelligence "substantially reduces wage inequality while raising average wages by 21 percent," according to a new working paper co-authored by an assistant professor at Stanford University.
The paper released this week by Lukas Althoff, "Task-Specific Technical Change and Comparative Advantage" and written alongside Hugo Reichardt, an affiliated professor at the Barcelona School of Economics, said, "Artificial intelligence is changing which tasks workers do and how they do them."
"Predicting its labor market consequences requires understanding how technical change affects workers’ productivity across tasks, how workers adapt by changing occupations and acquiring new skills, and how wages adjust in general equilibrium," it added.
"We introduce a dynamic task-based model in which workers accumulate multidimensional skills that shape their comparative advantage and, in turn, their occupational choices.
"We use the quantified model to study generative AI’s impact via augmentation, automation, and a third and new channel — simplification — which captures how technologies change the skills needed to perform tasks. Our key finding is that AI substantially reduces wage inequality while raising average wages by 21 percent," the researchers write.