The Double-Edged Sword of Technology: Job Creation and Replacement
At any given time, technology has two impacts on employment: it replaces traditional jobs and creates new fields of work. Machines replace farmers but enable the existence of aeronautical engineers, for example. So if technology creates new jobs, who gets them? How well do they pay? How long do new jobs stay new before they become just another mundane task that every worker can do?
Understanding New Work Dynamics
A new study of U.S. employment led by MIT labor economist David Autor sheds light on all of these questions. In the postwar United States, as Autor and his colleagues show in detail, college graduates under 30 tended to benefit from new forms of work more than anyone else.
“We had never really seen who was doing new work,” says Autor. “It is more likely to be done by young and educated people in urban environments.”
The Catalyst of Innovation-Based Employment
The study also contains a powerful, comprehensive finding: much innovation-based new work is driven by demand. The government-sponsored expansion of research and manufacturing in the 1940s in response to World War II led to an enormous amount of new work and new forms of expertise.
“This means that wherever we make new investments, we also end up with new specializations,” says Autor. “When you launch a large-scale activity, there is always the opportunity to acquire new expertise relevant to it. We found that exciting to see.”
Publication and Author Contributions
The article “What distinguishes New Work from More Work?” is forthcoming in the Annual Review of Economics. The authors include Caroline Chin, a graduate student in MIT’s Department of Economics; Anna M. Salomons, Professor at the Department of Economics at Tilburg University and at the School of Economics at Utrecht University; and Bryan Seegmiller PhD ’22, assistant professor at the Kellogg School of Management at Northwestern University.
Implications for Artificial Intelligence
Learning about new work and the types of workers who get it could be relevant to the spread of artificial intelligence, although Autor says it’s still too early to tell how AI will impact the workplace.
“People are really worried that AI-based automation will undermine certain tasks more quickly,” Autor notes. “Cutting tasks is not the same as cutting jobs, because many jobs involve many tasks. But we all say: Where will the new work come from? It is so important and we know little about it. We don’t know what it will be, what it will look like and who will be able to do it.”
Historical Context and Current Trends
The four co-authors also collaborated on a previous major study of new work published in 2024 that found that about six in 10 U.S. jobs from 1940 to 2018 were in new disciplines that had only developed extensively since 1940. The new study expands this line of research by taking a closer look at who occupies the new workspaces.
To do this, the researchers used U.S. Census Bureau data from 1940 to 1950, as well as the Census Bureau’s American Community Survey (ACS) data from 2011 to 2023. Because Census Bureau records become fully public after about 70 years, researchers in the former were able to examine individual-level data on occupations, salaries, and more, tracking the same workers who changed jobs between 1940 and 1950.
The Evolution of Expertise
New work, as Autor notes, is always associated with new forms of expertise. This expertise is initially rare; over time, it may become more common. In any case, specialist knowledge is often linked to new technologies.
“It requires mastering some skills,” says Autor. “What makes work valuable is not just the ability to do something, but also expertise. And that is often what separates high-paying work from low-paying work.” Furthermore, he adds, “It has to be concise. If everyone is an expert, then no one is an expert.”
Economic and Demographic Findings
By examining census data, researchers found that in 1950, about 7 percent of workers were employed in occupations created since 1930. More recently, about 18 percent of workers in 2011-2023 were in occupations established since 1970. (That’s about the same share of new jobs per decade, although Autor doesn’t think this is a clear trend.)
During these periods, new jobs have emerged more frequently in urban areas, with people under 30 benefiting more than any other age group. Taking a job in an industry with new jobs appears to have a lasting effect: people who were employed in new jobs in 1940 were 2.5 times more likely to be employed in new jobs in 1950 compared to the general population. College graduates were 2.9 percentage points more likely than non-college graduates to engage in a new job.
Wage Premium Dynamics
New forms of work also have a wage premium, i.e., overall better salaries than existing forms of work. But as the study shows, this wage premium is also decreasing over time as the specific expertise in many forms of new work is understood much more broadly.
“The scarcity value is eroding,” says Autor. “It becomes common knowledge. It itself becomes automated. New work becomes old.”
After all, driving a car was once a rare form of professional competence, emphasizes Autor. The use of word processing programs such as WordPerfect or Microsoft Word was also a specialized skill until well into the 1990s. Over time, however, using word processing tools became the most basic part of computer use.
Potential AI Impacts on Employment
Studying who gets new jobs led scientists to striking conclusions about how new work is created. The study examines county-level data from the World War II era, when the federal government supported new manufacturing facilities in public-private partnerships across the United States. It shows that counties with new factories had more new jobs and that 85 to 90 percent of new jobs between 1940 and 1950 were technology-driven.
In this sense, there were many demand-oriented innovations at that time. Today, public discourse about innovation often focuses on the supply side, namely the innovators and entrepreneurs trying to develop new products. But the study shows that the demand side can significantly influence innovation activity.
“Technology is not like ‘Eureka!’ where it just happens,” says Autor. “Innovation is a targeted activity. And innovation is cumulative. If you get far enough, it will develop its own momentum. But if not, it will never get there.”
AI’s Role in Future Job Creation
Which brings us back to AI, the topic that concerns so many people in 2026. Will AI create good new jobs or will it take away jobs? Well, it probably depends on how we implement it, thinks Autor. Think of the huge healthcare sector, where there could be many types of technology-driven new work if people are interested in creating jobs.
“There are different ways to use AI in healthcare,” says Autor. “One is simply to automate people’s work. The other is to allow people with different expertise to do different tasks. I would say the latter is more socially beneficial. But it’s not clear where the market will go.”
On the other hand, perhaps due to government-driven demand, AI could be used in various forms in ways that ultimately increase healthcare productivity and thereby create new jobs.
“More than half of healthcare dollars in the United States are public dollars,” Autor states. “We have a lot of influence there, we can push things in that direction. There are different ways to use that.”
This research was supported in part by the Hewlett Foundation, the Google Technology and Society Visiting Fellows Program, the NOMIS Foundation, the Schmidt Sciences AI2050 Fellowship, the Smith Richardson Foundation, the James M. and Cathleen D. Stone Foundation, and the Instituut Gak.
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