ABSTRACT:
This study investigates how artificial intelligence (AI) influences various online labor markets (OLMs) over time. Employing the Difference-in-Differences method, we discovered two distinct scenarios following ChatGPT’s launch: displacement effects featuring reduced work volume and earnings, exemplified by translation & localization OLM; productivity effects featuring increased work volume and earnings, exemplified by web development OLM. To understand these opposite effects in a unified framework, we developed a Cournot competition model to identify an inflection point for each market. Before this point, human workers benefit from AI enhancements; beyond this point, human workers would be replaced. Further analyzing the progression from ChatGPT 3.5 to 4.0, we found three effect scenarios, reinforcing our inflection point conjecture. Heterogeneous analyses reveal that U.S. web developers tend to benefit more from ChatGPT’s launch compared to their counterparts in other regions. Experienced translators seem more likely to exit the market than less experienced translators.
Key words and phrases: AI, artificial intelligence, online labor market, jobs, ChatGPT, large language models, competition models