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Taking a Closer Look at the Impact of Artificial Intelligence on Workers

, by Andrea Costa
Julien Sauvagnat has won a grant from the Italian government for a project that aims at plugging a huge gap in what we know about new technologies at firm level

The effects of robotics on individual workers' careers and the effects of artificial intelligence on firms' labor demand and aggregate employment are the two main points of DATAGROW, a project by Julien Sauvagnat of Bocconi's Department of Finance, which has won a €560,000 Starting Grant from the Italian government's FIS (Fondo Italiano per la Scienza) research fund.

Recent, fast progress in artificial intelligence (AI) and robotics has already begun to transform our economies. While AI can perform many tasks quicker and better than humans, and indeed for this reason exactly, many people worry that advances in AI will be followed by massive job losses, and call for legal curbs. On the face of it, though, we know little about the economic impact of the development of AI and robotics.

A reasoned debate on AI and its impact on the economy and on the labor market must take into account all aspects, whether negative or positive, of these technological developments. Concentrating only or mainly on the adverse effects would be an obstacle to devising appropriate policies. As Sauvagnat points out, AI will put some jobs in danger but it might also make finding a new job easier. Similarly, AI is going to allow large gains in productivity at firm level, which would increase value creation and sustain economic growth.

Surprisingly enough, existing literature about the economic impact of the development of AI, big data analytics and robotics on workers is still scarce. "The main problem facing researchers in this field is the lack of firm-level information," says Julien Sauvagnat. "In this project, I propose to exploit unique micro data on AI and robotics adoption at the firm level in order to provide an answer to my two research questions: what are the effects of AI on individual workers' career opportunities, and what are its effects on firms' labor demand."

"I will be able to exploit a wealth of data on French firms and workers, using state of the art econometric skills combined with cutting-edge computational linguistic tools in order to make progress on these questions," Sauvagnat adds. "I will have access to the best data on adoption of AI technologies at firm level, which will be employed to generate micro evidence on the effects of AI on firms."