This is a brief overview of a more detailed research paper conducted as part of the AI Safety Camp. Our aim is to give those outside the economic discourse a deeper understanding of the labor market impacts of AI and to discuss potential policies in response.

The draft report can be found here. All feedback greatly appreciated.

AI researchers and economists broadly agree that AI has the potential to disrupt labor markets, and policymakers broadly agree that “something must be done” about it. Labor markets touch every aspect of the economy and society, and transformative AI has the potential to cause immense dislocation across countries and industries in the next few years.

However beneath this surface-level agreement lies a wide diversity of opinion. There is a notable lack of consensus in the literature for how the labor market might be affected by advanced AI in the coming decades and, in turn, how governments and regulators should respond.

We offer a straightforward framework to those outside this economic debate by which they can conceptualize the potential futures we are facing. To address this uncertainty we have written a paper that summarizes the range of labor market predictions for the future of AI in a simple model with two factors - the net task displacement effect and the aggregate productivity effect. This framework allows us to understand four potential labor markets that are possible under transformative AI. With this framework in hand we then categorize the key policy levers that are relevant under each of these different possible futures.

This framework provides a simple way to categorize and discuss predictions about the future of the labor market under transformative AI and, in turn, allows for better decision making.

Understanding AI's Dual Impact on Labor Markets

Based on recent economic theory, we argue that AI's influence on labor demand will depend on two primary factors: the net task displacement effect and the aggregate productivity effect. The net displacement effect measures AI's overall impact on labor requirements by balancing task displacement and task creation in the labor market. Task displacement occurs when AI automates tasks previously done by humans, reducing labor demand. However, while transformative AI is likely to automate many tasks it will also create new tasks and jobs that don’t currently exist. T...

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