AI is cutting into entry-level jobs, according to a new Stanford University study, released on Tuesday.
Stanford researchers analyzed ADP payroll data, which included monthly payroll information for millions of workers at thousands of companies, to find how AI impacts employment for people ages 22 to 25 compared to other age groups.
The study found that the professions most exposed to automation with AI were operations managers, accountants, auditors, general managers, software developers, customer service representatives, receptionists, and information clerks. In those AI-impacted jobs, which lost the most entry-level positions to the technology, employment for young workers has declined by 13% over the past three years.
“There’s definitely evidence that AI is beginning to have a big effect,” Erik Brynjolfsson, Stanford professor, economist, and first author on the study, told Axios. He called the trend of reduced entry-level hiring “the fastest, broadest change” that he had ever seen in the workplace, second only to the shift to remote work during the pandemic.
Meanwhile, the study determined that since late 2022, when ChatGPT was released, employment for more experienced workers has remained steady or even improved in AI-impacted fields.
In software engineering and customer service, for example, the study found that “employment for the youngest workers declines considerably after 2022, while employment for other age groups continues to grow.”
Brynjolfsson explained that more experienced workers gain an advantage from on-the-job experience, which AI does not possess and has not yet been able to learn. However, he warned that industries might have difficulty finding the next generation of experienced hires if entry-level workers do not have opportunities to get started.
When it comes to employers, Brynjolfsson noted that the way companies view AI affects whether they have open jobs available. Firms that want to use AI to augment their workforce are hiring more human workers, as those who see AI as a replacement for human labor are hiring fewer employees, he stated.
The study supports another one released earlier this year by SignalFire, a venture capital firm that tracks the job changes of over 650 million people on LinkedIn. In a May report, SignalFire found that big tech companies have reduced entry-level hiring by 25% from 2023 to 2024 while simultaneously increasing hiring of experienced professionals.
SignalFire’s Head of Research, Asher Bantock, told TechCrunch that there was “convincing evidence” that AI was to blame for the reduction in entry-level hiring, because AI can handle routine tasks well. AI can code, conduct research, and even generate web applications, reducing the need for junior employees to handle those tasks.
AI leaders have been warning about the technology’s impact on hiring for months. In June, Nobel Prize winner Geoffrey Hinton, who is often called the “Godfather of AI” due to his pioneering work on AI, predicted that AI “is just going to replace everybody” in white-collar jobs. He said paralegals and call center representatives were most at risk in the immediate present of losing their jobs to AI.
Meanwhile, Anthropic CEO Dario Amodei stated in May that AI could take over half of all entry-level, white-collar jobs within the next one to five years. The move could cause mass joblessness, resulting in unemployment rising to up to 20%, he predicted.
AI is cutting into entry-level jobs, according to a new Stanford University study, released on Tuesday.
Stanford researchers analyzed ADP payroll data, which included monthly payroll information for millions of workers at thousands of companies, to find how AI impacts employment for people ages 22 to 25 compared to other age groups.
The study found that the professions most exposed to automation with AI were operations managers, accountants, auditors, general managers, software developers, customer service representatives, receptionists, and information clerks. In those AI-impacted jobs, which lost the most entry-level positions to the technology, employment for young workers has declined by 13% over the past three years.
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