Labor Market Responses to AI: Measuring Wage Effects Across U.S. Occupations

Abstract

Artificial intelligence (AI) is rapidly changing economies around the world, with some experts predicting an impact greater than the Industrial Revolution. As AI becomes more common in daily life and business, questions have grown about how it might affect jobs, wages, and inequality. The rise of automation and highly capable AI models has made people wonder which occupations will benefit and which might be at risk. This study looks at how exposure to AI technologies affects wage trajectories in the United States. Using occupational-level data from O*NET and the U.S. Bureau of Labor Statistics, we build an AI exposure index based on how easily tasks can be automated. We then use a fixed-effects regression model to see how AI exposure relates to changes in median wages and differences in earnings across occupations over time. Our goal is to better understand how AI influences income distribution and provide insight that could help guide policies for fairer labor market transitions as technology continues to evolve.