Large Language Models, Small Labor Market Effects

That is a new paper from Denmark, by Anders Humlum and Emilie Vestergaard, here is the abstract:

We examine the labor market effects of AI chatbots using two large-scale adoption surveys (late 2023 and 2024) covering 11 exposed occupations (25,000 workers, 7,000 workplaces), linked to matched employer-employee data in Denmark. AI chatbots are now widespread—most employers encourage their use, many deploy in-house models, and training initiatives are common. These firm-led investments boost adoption, narrow demographic gaps in take-up, enhance workplace utility, and create new job tasks. Yet, despite substantial investments, economic impacts remain minimal. Using difference-in-differences and employer policies as quasi-experimental variation, we estimate precise zeros: AI chatbots have had no significant impact on earnings or recorded hours in any occupation, with confidence intervals ruling out effects larger than 1%. Modest productivity gains (average time savings of 2.8%), combined with weak wage pass-through, help explain these limited labor market effects. Our findings challenge narratives of imminent labor market transformation due to Generative AI.

Not a surprise to me of course.  Arjun Ramani offers some interpretations.  And elsewhere (FT): “Google’s core search and advertising business grew almost 10 per cent to $50.7bn in the quarter, surpassing estimates for between 8 per cent and 9 per cent.”

Slow takeoff, people, slow takeoff.  I hope you are convinced by now.