Graduation Year

2020

Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics

Second Department

Computer Science

Reader 1

Patrick Van Horn

Reader 2

Nayana Bose

Rights Information

Amanda Caitlin Walker

Abstract

This thesis discusses artificial intelligence (AI) and the affect it has on employment. Specifically, we will look at thirteen different industries and the change in the number of employees, change in hours, and change in wages over time while controlling for GDP and amount of money being invested in AI. The purpose of this paper is to explore whether artificial intelligence has a positive or negative effect on the job market in industries that might be heavily affected by AI relative to those that might not.

I use data from the United States Bureau of Labor Statistics, the Federal Reserve, McKinsey and Company to create three datasets: change in wages, change in employment and change in hours. In each dataset, there were twelve to thirteen different industries considered.

After regressing the data, it was found that AI has little to no significant effect on employment numbers, hours and wages. I regressed the data twice: once using the whole dataset, and another one using only data after 2010. In the second set of regressions, there was higher statistical significance, suggesting that as time goes on, AI may start to affect certain industries more.

With AI receiving more attention and more investment, policies need to be considered in order to protect the laborers who will incur the cost of lower employment and lower incomes. These policies could include measures such as ensuring that there are enough jobs available for workers, as well as policies that specify how to ethically treat the AI systems. Stated differently, there will likely be a constant balancing test on the value of preserving and valuing human participation versus the practical efficiency of AI.

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This thesis is restricted to the Claremont Colleges current faculty, students, and staff.

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