AI Chatbots Show Limited Impact on Jobs and Wages, Danish Study Reveals

Time saved by AI offset by new work created, study suggests

A new study analyzing the Danish labor market in 2023 and 2024 suggests that generative AI models like ChatGPT have had almost no significant impact on overall wages or employment yet, despite rapid adoption in some workplaces. The findings, detailed in a working paper by economists from the University of Chicago and the University of Copenhagen, provide an early, large-scale empirical look at AI's transformative potential. In "Large Language Models, Small Labor Market Effects," economists Anders Humlum and Emilie Vestergaard focused specifically on the impact of AI chatbots across 11 occupations often considered vulnerable to automation, including accountants, software developers, and customer support specialists. Their analysis covered data from 25,000 workers and 7,000 workplaces in Denmark. Despite finding widespread and often employer-encouraged adoption of these tools, the study concluded that "AI chatbots have had no significant impact on earnings or recorded hours in any occupation" during the period studied. The confidence intervals in their statistical analysis ruled out average effects larger than 1 percent. "The adoption of these chatbots has been remarkably fast," Humlum told The Register about the study. "Most workers in the exposed occupations have now adopted these chatbots... But then when we look at the economic outcomes, it really has not moved the needle." AI creating more work? During the study, the researchers investigated how company investment in AI affected worker adoption and how chatbots changed workplace processes. While corporate investment boosted AI tool adoption -- saving time for 64 to 90 percent of users across studied occupations -- the actual benefits were less substantial than expected. The study revealed that AI chatbots actually created new job tasks for 8.4 percent of workers, including some who did not use the tools themselves, offsetting potential time savings. For example, many teachers now spend time detecting whether students use ChatGPT for homework, while other workers review AI output quality or attempt to craft effective prompts. Indeed, the reported productivity benefits were modest in the study. Users reported average time savings of just 2.8 percent of work hours (about an hour per week). The Register points out that the finding contradicts a randomized controlled trial published in February that found generative AI increased worker productivity by 15 percent on average. Humlum suggested to The Register that the difference stems from other experiments focusing on tasks highly suited to AI, whereas most real-world jobs involve tasks AI cannot fully automate, and organizations are still learning how to integrate the tools effectively. And even where time was saved, the study estimates only 3 to 7 percent of those productivity gains translated into higher earnings for workers, raising questions about who benefits from the efficiency. More research needed This conclusion, however, may face future scrutiny regarding its timing and scope. For example, data from 2023-2024 captures only an early phase of generative AI deployment, potentially missing lagging effects or the impact of more integrated generative AI uses beyond chatbots. Also, focusing on data from Denmark might overlook localized impacts already happening in other labor markets or specific fields like freelance creative work. Even so, the Danish study provides a valuable but limited snapshot that challenges some narratives of immediate, widespread labor market transformation from generative AI. Given the rapid pace of AI development, the longer-term economic impact of generative AI remains an uncertain and debated question that will likely be the subject of many future research papers. In that sense, this early look is unlikely to be the final word.

AI Isn't Lowering Your Salary Just Yet, Says Danish Research

Despite widespread fear about AI taking jobs, new research that looked at the Danish labour market shows that AI adoption has yet to have a significant impact on jobs or wages. The paper delved into the labor market effects of AI chatbots, drawing from survey data collected from 25,000 workers and 7,000 workplaces in Denmark, analyzed by economists from the University of Chicago and the University of Copenhagen. The paper looked at professions like accountancy, IT support specialists, teaching, journalism, and software development, many of which have been tipped for an AI overhaul by famous faces like Bill Gates. The researchers said their findings "challenged narratives of imminent labor market transformation due to Generative AI." The paper found that though AI produced modest productivity gains with an average time saving of 3% per worker -- just a few hours in an average working month -- this was actually counteracted by the new tasks created by AI. Anders Humlum, an economist who worked on the study, thinks these lower-than-may-be-expected productivity gains may be due to the difficulty of applying AI directly to real-world tasks, at least without significant extra steps. "First, most tasks do not fall into that category where ChatGPT can just automate everything," he said in an interview with The Register. AI chatbots reportedly created new job tasks for 8.4 percent of workers. "One very stark example that is close to home for me is there are a lot of teachers who now say they spend time trying to detect whether their students are using ChatGPT to cheat on their homework," said Humlum. Humlum also pointed to how workers are spending significant amounts of time assessing the quality of AI output -- for example, checking or debugging the code produced by a chatbot, or drafting prompts for AIs. This isn't to say that workers are simply ignoring the potential of AI chatbots. Humlum said chatbot adoption has been "remarkably fast" in the professions they looked at, boosted by many employer initiatives, but that this "really has not moved the needle" when it comes to real-world outcomes by wages or employment features. However, even if AI's short-term impact on jobs and wages may not be world-changing in the short term, this is unlikely to change the pessimistic views of the average American. Only 23% of Americans predict AI will have a positive impact on how people do their jobs, compared to 73% of AI experts, according to Pew Center research, which surveyed 5,400 adults.

Generative AI is not replacing jobs or hurting wages at all

'When we look at the economic outcomes, it really has not moved the needle' Instead of depressing wages or taking jobs, generative AI chatbots like ChatGPT, Claude, and Gemini have had almost no wage or labor impact so far - a finding that calls into question the huge capital expenditures required to create and run AI models. In a working paper released earlier this month, economists Anders Humlum and Emilie Vestergaard looked at the labor market impact of AI chatbots on 11 occupations, covering 25,000 workers and 7,000 workplaces in Denmark in 2023 and 2024. Many of these occupations have been described as being vulnerable to AI: accountants, customer support specialists, financial advisors, HR professionals, IT support specialists, journalists, legal professionals, marketing professionals, office clerks, software developers, and teachers. Yet after Humlum, assistant professor of economics at the Booth School of Business, University of Chicago, and Vestergaard, a PhD student at the University of Copenhagen, analyzed the data, they found the labor and wage impact of chatbots to be minimal. AI chatbots have had no significant impact on earnings or recorded hours in any occupation "AI chatbots have had no significant impact on earnings or recorded hours in any occupation," the authors state in their paper. The report should concern the tech industry, which has hyped AI's economic potential while plowing billions into infrastructure meant to support it. Early this year, OpenAI admitted that it loses money per query even on its most expensive enterprise SKU, while companies like Microsoft and Amazon are starting to pull back on their AI infrastructure spending in light of low business adoption past a few pilots. The problem isn't that workers are avoiding generative AI chatbots - quite the contrary. But they simply aren't yet equating to actual economic benefits. The adoption of these chatbots has been remarkably fast ... But then when we look at the economic outcomes, it really has not moved the needle "The adoption of these chatbots has been remarkably fast," Humlum told The Register. "Most workers in the exposed occupations have now adopted these chatbots. Employers are also shifting gears and actively encouraging it. But then when we look at the economic outcomes, it really has not moved the needle." The researchers looked at the extent to which company investment in AI has contributed to worker adoption of AI tools, and also how chatbot adoption affected workplace processes. While firm-led investment in AI boosted the adoption of AI tools -- saving time for 64 to 90 percent of users across the studied occupations -- chatbots had a mixed impact on work quality and satisfaction. The economists found for example that "AI chatbots have created new job tasks for 8.4 percent of workers, including some who do not use the tools themselves." In other words, AI is creating new work that cancels out some potential time savings from using AI in the first place. "One very stark example that it's close to home for me is there are a lot of teachers who now say they spend time trying to detect whether their students are using ChatGPT to cheat on their homework," explained Humlum. He also observed that a lot of workers now say they're spending time reviewing the quality of AI output or writing prompts. Humlum argues that can be spun negatively, as a subtraction from potential productivity gains, or more positively, in the sense that automation tools historically have tended to generate more demand for workers in other tasks. "These new job tasks create new demand for workers, which may boost their wages, if these are more high value added tasks," he said. But overall, the time savings from using AI was less than expected. According to the study, "users report average time savings of just 2.8 percent of work hours" from using AI tools. That's a bit more than one hour per 40 hour work week. The authors note that this finding differs from other randomized controlled trials that have found productivity benefits on the order of 15 percent. And they explain this discrepancy by saying that other studies have focused on occupations with high AI productivity potential and that real-world workers don't operate under the same conditions. "So I think there are two key reasons why the real economic gains are lower than [the cited studies]," said Humlum, noting that his study relies on actual tax data. "First, most tasks do not fall into that category where ChatGPT can just automate everything. And then second, we're in this middle phase where employers are still waking up to the new reality, and we're trying to figure out how to best really realize the potential in these tools. And just at this stage, it's just not been that much of a game changer." Where there are productivity gains to be had, Humlum and Vestergaard estimate that only a small portion of that benefit - between 3 and 7 percent - gets passed through to workers in the form of higher earnings. Humlum said while there are gains and time savings to be had, "there's definitely a question of who they really accrue to. And some of it could be the firms - we cannot directly look at firm profitability. Some of it could also just be that you save some time on existing tasks, but you're not really able to expand your output and therefore earn more. "So it's like it saves you time writing emails. But if you cannot really take on more work or do something else that is really valuable, then that will put a damper on how much we should actually expect those time savings to affect your earning ability, your total hours, your wages." Humlum said the impact of using AI chatbots, in the form of productivity, time savings, and work quality, can be improved through company commitment to internal education and evangelism. He pointed in particular to how firm initiatives can reduce the tool-usage gender gap - fewer women use these tools than men. But doing so at this point doesn't show much promise of payoff. "In terms of economic outcomes, when we're looking at hard metrics - in the administrative labor market data on earnings, wages - these tools have really not made a difference so far," said Humlum. "So I think that that puts in some sense an upper bound on what return we should expect from these tools, at least in the short run. "My general conclusion is that any story that you want to tell about these tools being very transformative, needs to contend with the fact that at least two years after [the introduction of AI chatbots], they've not made a difference for economic outcomes." ®

Generative AI isn't biting into wages, replacing workers, and isn't saving time, economists say

According to a new working paper from the University of Chicago's Becker Friedman Institute for Economics, generative AI chatbots like ChatGPT, Gemini, and Claude have had minimal to no impact on wages or employment so far, despite initiation concerns and worker apprehension. The findings come from a study of around 25,000 workers in Denmark across 11 AI-exposed occupations. The study found no significant changes in earnings or hours worked after the implementation of these AI tools. Anders Humlum and Emilie Vestergaard, the paper's authors, also noted no noticeable economic outcomes, such as total employment and wage bills at the firm level. The paper explores how companies can guide their workers, noting that encouragement and training efforts can boost adoption. Firm-led investments nearly doubled adoption rates from 47% to 83%, according to the research. However, the average time savings reported by users was only 2.8% - just over an hour on the basis that an employee is working a 40-hour week. Furthermore, only 8.4% of workers saw new jobs being created, such as teachers monitoring AI-assisted cheating, workers editing AI outputs and crafting better prompts. Contrary to the time-saving promises, Humlum and Vestergaard noted that these additional responsibilities actually increased workloads in some cases, meaning that time savings only translated into higher earnings 3-7% of the time. The researchers noted: "While AI chatbots are now widely used - saving users time and creating new job tasks, especially in workplaces that encourage their use - their overall impact on the labor market remains limited." They also noted that "labor market rigidities appear to delay the economic impact," demonstrating how a company's approach to artificial intelligence can dictate its success.