AI creates new winners and losers in the labor market

Demand for professional skills has changed significantly since the launch of ChatGPT in late 2022, according to a new study. But the picture is complex. While there were fewer jobs in areas such as copywriting and translation, the demand for other skills increased.

Will artificial intelligence (AI) revolutionize the labor market and make millions of jobs redundant? Or is there a tendency to exaggerate the impact of ChatGPT and other forms of generative AI?

A new international study published in the Journal for Economic Behavior and Organization concludes that the truth is probably somewhere in between. Artificial intelligence is rapidly replacing jobs in some areas but creates new jobs in others.

The study is based on statistical analyses of more than 3 million freelance jobs with different skill profiles posted on one of the leading international freelance platforms before and after the launch of ChatGPT in November 2022.

“We can see that the demand for skills such as translation or copywriting and simple programming decreased significantly after the introduction of ChatGPT. But the study also shows that the demand for other skills has increased,” says Ole Teutloff, who is affiliated with the Copenhagen Centre for Social Data Science (SODAS) at UCPH.

“The main takeaway is therefore that we are seeing significant changes in the composition of the labor market. But we are so far not talking about new AI technologies wiping out jobs across the board, making human labor redundant.”

Job posts down by almost a quarter

Overall, the analysis shows that the number of freelance jobs offered in areas where ChatGPT can largely take over has decreased by around 24% compared to jobs where AI is used as a complementary tool or has no impact at all.

The jobs most negatively affected were writing about real estate and “about us” pages on websites. Here the number of posted jobs fell by more than 50%. Conversely, the number of freelance jobs increased in areas such as machine learning, chatbot development and more creative forms of text and video production.

The decline was particularly strong for short-term jobs of 1–3 weeks and for jobs aimed at freelancers with limited experience. According to the researchers behind the study, this makes sense, as more complex tasks continue to require human involvement.

Johanna Einsiedler, co-author of the paper and Ph.D. student at SODAS, cautions against placing too much emphasis on specific numbers in the study, as the field of AI is developing rapidly. However, the overall trend is clear:

“We are potentially facing big changes. When we see the number of jobs available in the most AI-sensitive sectors falling by a quarter in just two years, it’s obviously significant. And we probably haven’t seen the full impact yet, with the freelance sector being affected faster than the rest of the labor market,” she says.

New demands for flexibility

According to the researchers behind the study, this poses new challenges for both employees and employers. Integrating AI into work processes will create winners and losers, depending on how AI technologies are implemented and what skills individuals have. Some jobs will disappear, and others will emerge.

This has happened before when new technologies have taken off. But in this case, policymakers should be paying special attention to how fast things are moving.

“It is a particular challenge when we talk about education and training, which takes time to change. Fortunately, Denmark has an education system that focuses on general skills. In my opinion, this will become even more important in a rapidly changing world. Some of the most important skills will be the curiosity to learn and the ability to adapt,” Teutloff says.

Examples of affected skill clusters

Negatively affected (less jobs):

• Writing “About Us” pages
• Real estate content writing
• Web design with Java script
• Proofreading
• Translation (W. European languages)
• Business analysis
• Data science and statistics

Positively affected (more jobs):

• Chatbots
• Creative writing, explainer videos
• Machine learning
• Travel planning