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

This post introduces a new measure of AI displacement risk called 'observed exposure,' which combines theoretical LLM capability (using Eloundou et al.'s β metric) with real-world usage data from Anthropic's Economic Index. It details the methodology for calculating observed exposure, emphasizing the weighting of automated and work-related uses. The post presents early evidence showing a negative correlation between observed exposure and projected job growth, and analyzes the demographic characteristics of highly exposed workers. It also investigates the impact of observed exposure on unemployment trends, finding no systematic increase but suggestive evidence of slowed hiring for younger workers in exposed occupations.