What is the impact of AI on productivity?

It’s difficult to find good research on the impact of AI on human productivity. A National Bureau of Economic Research (NBER) paper illustrates that the impact can be nuanced.

Rather than harm high-skill occupations (as most studies show), the paper shows that some AI technologies can benefit low-skill workers and not impact high-skill workers in at least some occupations.

We find that AI improves the productivity of taxi drivers by shortening the search time by 5%, on average. . . . Importantly, the productivity gain is concentrated on low-skilled drivers; the impact on low-skilled drivers, where skill is defined by previous driving performance, is 7%, whereas the impact on high-skilled drivers is nearly zero or even negative (albeit not statistically significant). As a result, the AI narrows the productivity gap between high- and low-skilled drivers by about 14%.


Of course, it’s possible that the AI benefit to low-skill taxi drivers might be viewed as a harm to high-skill taxi drivers in a competitive environment. The impact will be complex.

AI Money and Claims

One report says, lots of money being thrown at AI!

AI-related companies raised $9.3B in 2018, a 72% increase compared to 2017.

PWC MoneyTree Report, Q4 2018

Another report says lots of European AI startups might not actually be focused on AI?

According to the survey from London venture capital firm MMC, 40 percent of European startups that are classified as AI companies don’t actually use artificial intelligence in a way that is “material” to their businesses. MMC studied some 2,830 AI startups in 13 EU countries to come to its conclusion, reviewing the “activities, focus, and funding” of each firm.

Forty percent of ‘AI startups’ in Europe don’t actually use AI, claims report

When a beverage maker’s stock soars after adding “blockchain” to its name on the NASDAQ, it’s not hard to see why companies are perfectly fine being thought of as AI startups despite evidence to the contrary. Caveat emptor.

Real Fake School

This has been in the news a lot. I’m kind of a fan of this in a way that I haven’t seen discussed (the real fake school, that is). As a way to make money, this seems pretty good, and straight forward. There is a supply of foreigners that want to stay in America and are willing to pay for it. Our government could use some money.

Population Equilibrium

This is a great paragraph:

It is unlikely that the trend towards lower fertility will reverse. “Once having one or two children becomes the norm, it stays the norm,” write Darrell Bricker and John Ibbitson in “Empty Planet: The Shock of Global Population Decline”. “Couples no longer see having children as a duty…to their families or their god. Rather, they choose to raise a child as an act of personal fulfilment. And they are quickly fulfilled.”

Thanks to education, global fertility could fall faster than expected

This Atlantic article is now 20 years old. I still remember it because it blew me away and I have believed its premise ever since: “Fifty years from now the world’s population will be declining, with no end in sight.”

Our long-term problem may indeed be maintaining a stable population, not managing a growing one.

Demand, Meet Supply

Around 2012, there was a big concern that we desperately needed computer science majors or the economy would falter. Quite a bit of hand-wringing ensued, though the underlying premise was mostly debunked.

It’s 2019, and now people can’t even get into computer science classes.


“I had a faculty member who came in with an offer from a bank, and they were told that, with their expertise, the starting salary would be $1 million to $4 million,” said Greg Morrisett, dean of computing and information science at Cornell University.

The Hard Part of Computer Science? Getting Into Class

The market provides!

See also Kamala Harris’s Disappointing Economics.