"The entire framework most people use to think about automation risk, built on 'task exposure' scores, is measuring something real but nearly useless for predicting what will actually happen to employment."
"Knowing that AI can perform a significant portion of certain tasks does not tell you whether firms will employ fewer workers. It depends on something else entirely: what happens to demand when AI-driven productivity makes the service cheaper or faster."
The common concern about AI taking jobs is based on flawed assumptions regarding task exposure and automation risk. Economists emphasize the importance of price elasticity of demand, which is often overlooked. Current analyses focus on the overlap between AI capabilities and job tasks, suggesting potential job loss. However, this approach fails to consider how AI-driven productivity affects demand for services. If AI enhances efficiency, it may lead to increased demand rather than job loss, highlighting the need for a more nuanced understanding of AI's impact on employment.
Read at Silicon Canals
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