WORKS IN PROGRESS
Generative AI and Labor Market Matching Efficiency (Previously, "More, but Worse: The Impact of AI Writing Assistance on the Supply and Quality of Job Posts") with John Horton (Under review)
Abstract: Reductions in private search costs due to advances in information technology can improve market efficiency. Although, changes in private search costs can change behaviors, making the welfare implications unclear if that behavior creates negative externalities, as was the case here. We consider the market efficiency effects of the introduction of an AI tool into a labor market. In order to lower their search costs, potential employers were randomly offered AI-written first drafts of their job post. The assistance was widely accepted and treated employers were 19% more likely to post a job; those posting spent 44% less time writing. Despite the substantial increase in job posts, there was no discernible increase in matches. The lack of match formation was mostly due to marginal jobs being posted by employers with lower intent. Up to a fifth of the missing matches were caused by direct impacts on the job posts—in the sense that they were more generic and less informative to jobseekers. This combination of increased congestion and degradation in informativeness wasted jobseeker time as jobseekers applied to jobs they otherwise would not have. Quantifying this waste, the per job post loss to jobseeker welfare is six times larger than the increase to employer welfare from time saving. These negative efficiency outcomes persists after the close to market wide adoption of the technology, showing the reductions in private search costs in this context harmed market efficiency.
Presentations: Columbia’s Management, Analytics, and Data Conference, Yale AI/ML Conference, CMU Mini-Conference on AI and Future of Work
GenAI as an Exoskeleton: Experimental Evidence on Knowledge Workers Using GenAI on New Skills with Lisa Krayer, Mohamed Abbadi, Urvi Awasthi, Ryan Kennedy, Pamela Mishkin, Daniel Sack, Francois Candelon
(R&R at Nature Human Behaviour)
Abstract: “Reskilling” is often used to denote workers gaining new capabilities and/or knowledge that allows them to move jobs or industries as the demands of the market changes. This paper demonstrates that while generative artificial intelligence (GenAI) can act as an “exoskeleton,” enhancing workers’ capabilities while they attempt new skills, these gains are dependent on the continued use of the technology. When the “exoskeleton” is removed, little to no knowledge is retained independently, revealing that the newfound capabilities are temporary and reliant on the external support provided by GenAI. We run a randomized controlled trial on “reskilling” with GenAI by providing Boston Consulting Group (BCG) consultants with access and training in using ChatGPT to solve technical problems. We measure their performance on real data science tasks outside their skill sets, which cannot be independently solved by ChatGPT. Treated workers score 49, 20, and 18 percentage points higher than those in the control group on the three tasks and perform close to the level of real BCG data scientists on two of the three tasks. However, treated workers are no better at answering technical questions without the use of ChatGPT post-experiment, suggesting their demonstrated newfound technical capabilities do not imply knowledge acquisition. These results suggest that GenAI can be used to help workers reskill to meet the greater technical demands of the labor market but that the work of nontechnical workers using GenAI is not interchangeable with that of data scientists.
Workers Response to Price Uncompetitiveness: Evidence from a Field Experiment with Apostolos Filippas and John Horton
Abstract: If and how to regulate online marketplaces is an open question important to both platform designers and policy makers. Using a large field experiment in an online labor market, we analyze the effects of a platform minimum wage. Workers were randomly assigned individual price floors which prevented treated workers from bidding hourly rates below their floor. Workers for whom the floor was likely binding—those historically bidding below the floor—suffered a decline in job-finding probability(30%), but higher wages conditional upon being hired(9%). Treated workers made lower earnings overall, but higher earnings conditional on working at least one hour on the platform. Despite a job being “worth more” if hired, affected workers lowered their search intensity. They did not move to the “uncovered sector”—jobs with a fixed price rather than an hourly wage, nor did they direct their search to better fitting jobs. They were also more likely to exit the platform. After the conclusion of the experiment, the platform rolled out the $3 per hour minimum wage platform wide, allowing us to observe the the employment outcomes and job search behavior in equilibrium.
Make-or-buy for recruiting?: Experimental Evidence on Helping Firms Hire, Masters Thesis
Abstract: In a randomized control trial, a large online labor market randomly provided hiring assistance to employers. This hiring assistance could take the form of (a) expanding the firm's choice set by attracting more applicants or (b) helping them choose among that choice set, based on the determination of the helper. Broadly speaking, job openings with few applicants were given recruiting help, while openings with many applicants were given selection help. All were given general advice on the hiring process. We find that while treated employers increased their search efforts and received more applications, they were no more likely to make a hire than job posts in the control group. We find evidence that treated employers demand less labor from their hires---suggesting that employers know their own preferences better than third-party assistance.
Business Churn, Labor Intensity, and the Minimum Wage with Ekaterina Jardim
Most Recent Draft Online Appendix
Working paper version: W.E. Upjohn Institute for Employment Research Working Paper 19-298.
Abstract: We study the effects of a large increase in Seattle's minimum wage on business churn, hours, and revenue using Washington State administrative data. We find the minimum wage affected businesses both at the intensive and extensive margins. At the intensive margin, surviving businesses increased labor costs without decreasing hours and saw no reductions in revenue. At the extensive margin, businesses experienced higher rates of exit and newly opened businesses became less labor-intensive. We find the total effect of the minimum wage to low-wage employment, defined as jobs paying 130% of the minimum wage or less, came from changes to the composition of businesses.
PUBLICATIONS
Job Market Paper: Algorithmic Writing Assistance on Jobseekers' Resumes Increases Hires with Zanele Munyikwa and John Horton, 2025. (Management Science)
Working paper version: NBER Working Paper No. 30886
Abstract: There is a strong association between writing quality in resumes for new labor market entrants and whether they are ultimately hired. We show this relationship is, at least partially, causal: in a field experiment in an online labor market with nearly half a million jobseekers, treated jobseekers received algorithmic writing assistance on their resumes. Treated jobseekers were hired 8% more often. Contrary to concerns that the assistance takes away a valuable signal, we find no evidence that employers were less satisfied. We present a model where better writing does not signal ability but helps employers ascertain ability, rationalizing our findings.
Yahoo News: AI can help job seekers get noticed and hired, study finds
Market Watch: Looking for a new job? Brush up your résumé with a computer algorithm. Seriously, it could pay off.
Presentations: NBER Lightning Talk, LinkedIn TechTalk, INFORMS 2022, Wharton Generative AI & Business Conference 2023, Oxford Platform Economics Seminar Series
Boundary Discontinuity Methods and Policy Spillovers with Ekaterina Jardim, Mark C. Long, Robert Plotnick, Jacob Vigdor, 2024. (Journal of Public Economics)
Working paper version: NBER Working Paper No. 30075
Abstract: The boundary discontinuity method of causal inference may yield misleading results if a policy’s impacts do not stop at the border of the implementing jurisdiction. We use geographically precise longitudinal employment data documenting worker job-to-job mobility to study policy spillovers in the context of three local minimum wage increases. Estimated spillover impacts on wages and hours are statistically significant, geographically diffuse, and sufficient to create concern regarding interpretation of results even using not-immediately-adjacent regions as controls. Spillover effects appear less concerning with smaller interventions or those or adopted in a smaller jurisdiction.
Minimum Wage Increases and Low-Wage Employment: Evidence from Seattle: with Ekaterina Jardim, Mark C. Long, Robert Plotnick, Jacob Vigdor, and Hilary Wething, 2022. (AEJ: Economic Policy)
Working paper version: NBER Working Paper No. 23532
Abstract: Seattle raised its minimum wage to as much as $11 in 2015 and as much to $13 in 2016. We use Washington State administrative data to conduct two complementary analyses of its impact. Relative to outlying regions of the state identified by the synthetic control method, aggregate employment at wages less than twice the original minimum, measured by total hours worked, declined. A portion of this reduction reflects jobs transitioning to wages above the threshold; the aggregate analysis likely overstates employment effects. Longitudinal analysis of individual Seattle workers matched to counterparts in outlying regions reveals no change in the probability of continued employment, but significant reductions in hours particularly for less-experienced workers. Job turnover declined, as did hiring of new workers into low-wage jobs. Analyses suggest aggregate employment elasticities in the range of -0.2 to -2.0, concentrated on the intensive margin in the short run and largest among inexperienced workers.
Media coverage: The Economist, FiveThirtyEight, Los Angeles Times, New York Times, New York Times (The Upshot), Seattle Times, Washington Post
Presented at: NBER Summer Institute 2017, PAA Annual Meeting 2017, APPAM Fall Conference 2016, APPAM International Conference 2016
GRAVEYARD
Tax Pass-Through with Information Asymmetry in an Online Labor Market
Presented at HBS Digital Initiative Workshop