Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
A study of artificial intelligence chatbot impact on labor markets in Denmark suggests the economic impact is “minimal.” Indeed, the study authors say “AI chatbots have had no significant impact on earnings or recorded hours in any occupation.”
The study published by the U.S. National Bureau of Economic Research involved two large-scale adoption surveys conducted in late 2023 and 2024 covering 11 occupations; 25,000 workers and 7,000 workplaces.
Productivity gains were said to be modest, with an average time savings of three percent. But the study notes that AI chatbots have created new job tasks for 8.4 percent of workers, including some who do not use the tools themselves.
Nor has there been any impact on worker earnings. “Workers overwhelmingly report no impact on earnings as of November 2024,” the study says.
Nor do productivity gains seem to have much impact on earnings. “We estimate that only three to seven percent of workers’ productivity gains are passed through to higher earnings,” say authors Anders Humlum and Emilie Vestergaard.
“Comparing workplaces with high versus low rates of chatbot usage, we find no evidence that firms with greater adoption have experienced differential changes in total employment, wage bills, or retention of
incumbent workers,” the authors say.
The authors also note that Denmark has institutional characteristics similar to those of the United States, with similar uptake of generative AI; how hiring and firing costs; decentralized wage bargaining and annual wage negotiations.
The 11 occupations studied included accountants, customer support specialists, financial advisors, HR professionals, IT support specialists, journalists, legal professionals, marketing professionals, office clerks, software developers, and teachers.
The findings should not come as a surprise. The “productivity J-curve" suggests that initial investments in new technologies may temporarily suppress productivity before delivering long-term benefits.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Robots, as a form of embodied artificial intelligence, are declining in cost so much that it is virtually inevitable they will become functional substitutes for human labor in many instances, as wage costs continue to grow at a relatively consistent rate.
On the other hand, sometimes there is no substitute for humans.
In many cases, at some point, there is a total cost of ownership crossover: it becomes more reasonable to use robots instead of humans for some tasks.
Using an employment cost index, which compares wage costs, inflation and benefits, the cost of human labor has increased about 40 percent since 2010. The cost of using robots, per hour, has fallen 400 percent over the same period.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
