I don't agree with most all of it.
I read it down to the conclusion.
"We explore the effects of AI on the skill premium. To this end, we develop a nested CES production function in which industrial robots predominantly substitute for low-skill workers, whereas AI predominantly substitutes for high-skill workers. We show analytically and numerically that AI has the potential to reduce the skill premium and thereby mitigate or even reverse increases in inequality that have been observed in recent decades."
Why I don't agree; robots, CNC, AI all still greatly enhance the abilities of high skill workers way more than low skill workers.
While to they raise the ability of low skill workers, they similarly raise the ability of high skill workers, not scientifically, by the same amount.
They raise the salary of low skill workers because they can now do things they could not do, supported by the paper. But this is also true of high skill workers.
There is not a cap on ability or productivity. For example, similar to AI, a CNC machine be more effective in the hands of a high skill worker than a low skill worker. What AI might do is lower the entry of them to low skill workers.
In the end all the wages may go up, but the disparity will be the same.
I'm an economist and I think just posting the paper misses a bit of context:
There's a bit of an arms race between researchers to write what they hope will be influential papers about how ChatGPT will affect (the economy|inflation|gdp|productivity|inequality|whatever).
I would say that at least 90% of all the new papers are quite useless, so not surprised that you find that
My loose thought model uses an AI assistant on a PC or similar thats constantly trying to predict and help you, and that someone actually makes this desirable and not just Clippy 3.0. This AI mimicry will advance high skilled productivity quite a bit, but when an AI has been well trained on a high skilled person, it can then be backwards applied to a low skilled person as a decent bump in productivity, and also potentially be run solo by software thieves in the third world for like 1/4 of the benefit of hiring someone. And that this sort of creates a marketplace for trained assistant AIs, "This one trained on an electrical engineer for 3 years" "This one trained on an entire call centre for 10 years, no longer needs guidance" etc etc.
if you're of the best story or essay writers, chatgpt won't be able to help you much. If you're one of the very top programmers, you will find chatgpt full of all kinds of stupid mistakes in the work you doest (which is hard). If you are not a native speaker (like me), chatgpt is magical for helping me write. If you're an average developer, chatgpt would offer tremendous help as most problems you encountered are common problmes that chatgpt is likely to solve (or contain fewer mistakes in doing so). So no it is not equal. High skill workers certainly lose more comparatively.
There is zero value, or negative value, from an employee that just copied and pastes the output from ChatGPT and runs it. The employer can just do that herself and save the cost of the “developer” entirely.
"Why I don't agree; robots, CNC, AI all still greatly enhance the abilities of high skill workers way more than low skill workers."
At somepoint CNC won't need humans making things in CAD. You'll just tell and AI what to great and it'll model it and plug it all in.
I believe there will be job loss in both categories too. Obviously that leads to inequality as well. Sure, some productivity increase will be helpful, but after a certain point if demand doesn't also increase it will result in headcount cuts.
I feel bad for the next generation. I'm not sure what ro tell my kid to study when they get older. It seems the only places with longer-term stability will be with artificial or natural moats. Maybe law (litigation), law enforcement, or medicine. Maybe a business degree since that could be applied to many different things. I don't know. The choice seemed easy for me - I was good with computers and logic, and IT paid well.
> You'll just tell and AI what to great and it'll model it and plug it all in.
That's the same as writing a book. Anyone can patch random amounts of text together and call it a book. Will it be good enough for people to read? Only if the person doing it is good enough to create an appealing story. The same is still valid for AI: some people know how to use it better and will get better results while 99% will be trash and ignored. This won't ever change, imo.
I generally agree with you except that all the wages may go up: there are tools that directly replace people and their wages go down or just disappear from the scene.
AI is just one powerful example but there are a lot of recent example that sounds more basic: before [Twitter] Bootstrap was created companies of all sizes hired graphic designers to create their web page. Most of this work now is compressed in time and the same graphic designer do a smaller part.
At the same time, in the software development field we invent all kind of tool that increase the size of the team for other kind of people (e.g. React developers). Regarding AI, Low Code, or whatever concepts we use in the following year I think the role of software development will also decrease.
People touting automation rarely follow up after the initial effort in my opinion
For example, i work on heavy diesel trucks. We've had tire machines to mount and unmount tires for 40 years now. Machines still can't so the entire process though.
"We explore the effects of AI on the skill premium. To this end, we develop a nested CES production function in which industrial robots predominantly substitute for low-skill workers, whereas AI predominantly substitutes for high-skill workers. We show analytically and numerically that AI has the potential to reduce the skill premium and thereby mitigate or even reverse increases in inequality that have been observed in recent decades."
Why I don't agree; robots, CNC, AI all still greatly enhance the abilities of high skill workers way more than low skill workers.
While to they raise the ability of low skill workers, they similarly raise the ability of high skill workers, not scientifically, by the same amount.
They raise the salary of low skill workers because they can now do things they could not do, supported by the paper. But this is also true of high skill workers.
There is not a cap on ability or productivity. For example, similar to AI, a CNC machine be more effective in the hands of a high skill worker than a low skill worker. What AI might do is lower the entry of them to low skill workers.
In the end all the wages may go up, but the disparity will be the same.