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The Labor Market Effects of Generative Artificial Intelligence

 

The Labor Market Effects of Generative Artificial Intelligence

40 Pages Posted: 10 Apr 2025 Last revised: 25 Jun 2025

Jonathan Hartley

Stanford University

Filip Jolevski

Department of Economics, George Mason University; Enterprise Analysis Unit, Development Economics Vice Presidency, The World Bank

Vitor Melo

Clemson University

Brendan Moore

Stanford University, Department of Economics

Date Written: December 18, 2024

Abstract

In this paper we develop a new survey analyzing Generative AI use in the labor market to assist in measuring the economic effects of Generative AI. We find, consistent with other surveys that Generative AI tools like large language models (LLMs) are most commonly used in the labor force by younger individuals, more highly educated individuals, higher income individuals, and those in particular industries such as customer service, marketing and information technology. Overall, we find that LLM adoption at work among U.S. survey respondents above 18 has increased rapidly from 30.1% as of December 2024, to 43.2% as of March/April 2025. We also estimate Generative AI use at the intensive margins, its efficiency gains and its use in job search and seek to examine the effects of LLMs on productivity and the labor market using a number of additional datasets. These results have several implications for policymakers, businesses, and researchers navigating the evolving landscape shaped by the integration of Generative AI into the global economy.

Keywords: Large Language Models, Artificial Intelligence, Employment Dynamics, Automation

JEL Classification: E00, E02, F22, F43, P48


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Productivity Gains From Using AI

 As AI tools become increasingly integrated—and in some cases, even mandated—into professional workflows, their real-world impact on productivity is becoming more evident.

This chart, via Visual Capitalist's Niccolo Conte, compares the average time it takes U.S. adults to complete 18 common work tasks with and without the use of generative AI, based on a December 2024 survey of 4,278 respondents conducted by Stanford University and the World Bank.

Generative AI Improves Productivity by Over 60%

Across all tasks, using generative AI reduced the average time taken to complete them by more than 60%.

Here’s how much time using generative AI saved across 18 common work tasks, in average number of minutes:

TaskTime With GenAI (avg. minutes)Time Without GenAI (avg. minutes)Time Reduction
Writing2580-69%
Active Learning2676-66%
Critical Thinking27102-74%
Troubleshooting28115-76%
Judgement and Decision Making2879-65%
Management of Material Resources2892-70%
Mathematics29108-73%
Time Management2977-62%
Complex Problem Solving30122-75%
Instructing3193-67%
Operations Analysis3198-68%
Systems Analysis3187-64%
Managament of Personnel32103-69%
Programming33129-74%
Equipment Maintenance34124-73%
Quality Control Analysis36103-65%
Management of Finances38106-64%
Technology Design39142-73%

Some of the largest gains came from highly technical or analytical tasks. For example, troubleshooting saw a 76% reduction in time, while critical thinking, programming, and technology design all showed over 70% time savings with generative AI.

Interestingly, even human-centric tasks—such as instructing, judgment and decision-making, and management of personnel—benefited from AI tools, with time reductions ranging from 60–70%.

Accelerating Work With AI

While AI is often framed as a replacement for human labor, this data shows that human workers empowered by AI can do the same tasks far more efficiently.

Writing, for example, dropped from an average of 80 minutes to just 25 minutes with generative AI. For complex cognitive functions like mathematics, systems analysis, and operations, AI reduced the time taken to complete tasks by over an hour.

Furthermore, AI adoption is increasing rapidly. According to the survey, LLM adoption at work for respondents aged 18 or older increased from 30% in December 2024 to over 43% as of March/April 2025.

If this trajectory continues, AI-driven productivity gains could scale from individual tasks to entire organizations, and potentially reshaping broader economic outcomes.

AI is transforming how we work and live online, but which companies are leading this new era of technology? Find out in this infographic on Voronoi, the new app from Visual Capitalist.

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