Technology impacts employment in two main ways: it replaces traditional jobs and creates new ones. Machines may replace farmers but also enable roles like aeronautical engineers. So, who benefits from these new jobs, and how well do they pay? A recent study led by MIT labor economist David Autor sheds light on these questions.
As Autor and his colleagues reveal, new forms of work in postwar America have primarily benefited college graduates under 30. "We had never seen exactly who is doing new work," Autor states. "It’s done more by young and educated people, in urban settings."
The study also highlights a crucial insight: much of the innovation-driven new work is demand-driven. Government-backed research and manufacturing expansions during World War II accounted for significant new work and expertise. "Wherever we make new investments, we get new specializations," Autor explains.
The forthcoming paper, "What Makes New Work Different from More Work?" includes contributions from Autor, Caroline Chin, Anna M. Salomons, and Bryan Seegmiller. While Autor believes it’s too early to determine AI's impact on the workplace, he acknowledges concerns that AI-based automation could erode specific tasks rapidly. "Eroding tasks is not the same as eroding jobs, as many jobs involve multiple tasks."
The research shows that from 1940 to 2018, about 60% of jobs in the U.S. were in new specialties that developed broadly since 1940. The latest study extends this research by analyzing who fills these new roles, using U.S. Census data from 1940 to 1950 and American Community Survey data from 2011 to 2023.
Autor notes that new work is always tied to new forms of expertise, which starts scarce but may become common over time. "What makes labor valuable is not just the ability to do tasks, but specialized knowledge."
The study found that in 1950, about 7% of employees had jobs in types of work that emerged since 1930, rising to about 18% between 2011 and 2023. New work has emerged more often in urban areas, benefiting those under 30. Moreover, people employed in new work in 1940 were 2.5 times more likely to be in new work in 1950 compared to the general population. College graduates were more likely to engage in new work, which also had a wage premium, although this premium fades over time.
Autor emphasizes that technology-driven innovation is not spontaneous; it's a purposive activity. He questions whether AI will create beneficial new jobs or eliminate existing ones, depending on implementation. In the healthcare sector, AI could lead to various tech-driven roles if people are invested in job creation. "With government-driven demand, AI could enhance productivity in healthcare, creating new jobs as a result."
Blogger's Review: This research highlights the new job opportunities arising from technological change and the pivotal role of youth in this evolution. As AI continues to evolve, leveraging new technologies to enhance productivity and create jobs will be crucial for future economies. Policy guidance and market demand will be essential to ensure AI contributes positively to society.