Employment increases, driven by more people being recruited to senior roles at the expense of juniors, when firms adopt AI, according to a study from King's College London and Stanford University, USA.
"It's difficult to predict exactly which occupations new technologies will replace and which they will complement. And while this study doesn't fully settle that question, it does provide an indication of how firms are changing their workforce after adopting generative AI. We find a similar pattern in many labour markets, with firms employing fewer junior workers and more senior employees after adopting AI."
Bouke Klein Teeselink, Faculty of Social Science and Public Policy, King's College London
The study, which provides some of the first internationally comparable evidence of how AI is changing workforces, finds that firm-level AI adoption leads to around a 3.3% increase in the number of employees recruited overall. The authors found that while senior employment increases by 6.7%, junior employment falls by 2.5%.
The study analysed 1.25 billion job advertisements and 158 million employee positions across 41 countries between 2021 and 2016. The researchers examined how firms change after adopting generative AI and found that while AI adoption is associated with decline in the share of junior roles, demand for senior employees and workers in computer and mathematical occupations increased. The researchers defined 'adoption' based on job ads, and categorised firms as adopters once they mention in their job ads that applicants will need to use genAI in their job.
Most previous research on generative AI and labour markets has focused on individual countries, making it difficult to compare findings across economies. By applying a consistent methodology across 41 countries, the researchers were able to identify common patterns in how firms are adapting to AI.
Bouke Klein Teeselink, Faculty of Social Science and Public Policy, King's College London, said: "It's difficult to predict exactly which occupations new technologies will replace and which they will complement. And while this study doesn't fully settle that question, it does provide an indication of how firms are changing their workforce after adopting generative AI. We find a similar pattern in many labour markets, with firms employing fewer junior workers and more senior employees after adopting AI."
Bharat Chandar, Standford University, added: "This is the first global study of its kind and the findings suggest that generative AI is changing the mix of jobs within organisations rather than reducing overall employment. It is interesting to note, we observed this trend globally, from the US to Brazil to Saudi Arabia."
The research contributes to ongoing work at King's on the future of work and artificial intelligence, including through the AI and Workforce Futures programme.
The paper, How Does AI Change Labor Demand? Evidence from 41 Countries, was co-authored by Bharat Chandar of Stanford University and Bouke Klein Teeselink of King's College London.
