New paper estimates LLMs raised US natural unemployment rate by 0.1-0.2 points
mattbeane · x · 2026-09-21
A paper by Hie Joo Ahn and Nicholas A. Carollo, "Artificial Intelligence and Labor Market Reallocation," documents how AI has affected US labor market stocks and flows.
- The authors decompose unemployment inflow/outflow trends by AI exposure and adoption, combined with a theoretical model of structural unemployment.
- They estimate the natural rate of unemployment has risen by roughly 0.1-0.2 percentage points since the introduction of LLMs, with considerable uncertainty.
- Praised as a careful, important analysis of AI's impact on labor market reallocation.
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