Labor market impacts of AI: A new measure and early evidence

Economic ResearchLabor market impacts of AI: A new measure and early evidenceMar 5, 2026Read in PDFKey FindingsWe introduce a new measure of AI displacement risk, observed exposure, that combines theoretical LLM capability and real-world usage data, weighting automated (rather than augmentative) and work-related uses more heavilyAI is far from reaching its theoretical capability: actual coverage remains a fraction of what's feasibleOccupations with higher observed exposure are projected by the BLS to grow less through 2034Workers in the most exposed professions are more likely to be older, female, more educated, and higher-paidWe find no systematic increase in unemployment for highly exposed workers since late 2022, though we find suggestive evidence that hiring of younger workers has slowed in exposed occupationsIntroductionThe rapid diffusion of AI is generating a wave of research measuring and forecasting its impacts on labor markets. But the track record of past approaches gives reason for humility.For example, a prominent attempt to measure job offshorability identified roughly a quarter of US jobs as vulnerable, but a decade on, most of those jobs maintained healthy employment growth. The government’s own occupational growth forecasts, while directionally correct, have added little predictive value beyond linear extrapolation of past trends. Even in hindsight, the impact of major economic disruptions on the labor market is often unclear. Studies on the employment eff...