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Displacement Is Endogenous: AI Workers in a Search-and-Matching Labor Market

Ibrahim Denis Fofanah · 2026 · arXiv (Cornell University)

DOI: 10.48550/arxiv.2610.14850 · cited by 0 works (OpenAlex) · open-access PDF

Indonesian

Kami membangun pasar tenaga kerja di mana sistem AI memasuki sebagai pekerja: mereka mengajukan pekerjaan, melewati pemeriksaan, dipekerjakan, dan dipecat, bersama dengan manusia. Perusahaan melaporkan pekerjaan kosong, pekerja mencari dengan gesekan, dan permintaan produk meluncur ke bawah. Di sekitar 30 benih berjalan per konfigurasi, masuk AI pada 70% dari upah manusia meningkatkan pengangguran dengan 4,1 poin persentase (95% CI 3,5 ke 4,6) dan meninggalkan 12,2 lebih sedikit orang yang dipekerjakan (CI 10.5 ke 13,9). Layoffs mendominasi ketika AI jauh lebih murah daripada manusia: margin dipecat menyumbang 7.2 dari pekerjaan yang hilang dan pengangguran yang berkurang untuk 5,0, meskipun sebagian besar pekerja yang dipecat menemukan pekerjaan lagi. Jarak harga yang lebih luas mengurangi pemindahan, karena perusahaan AI murah membuat diperluas: pada paritas harga, dengan pemecatan nol, efek pengangguran

Machine translation (Meta M2M100); the English original follows.

Abstract

We build a labor market in which AI systems enter as workers: they apply for jobs, pass screenings, get hired, and get dismissed, alongside humans. Firms post vacancies, workers search with friction, and product demand slopes downward. Across 30 seeded runs per configuration, AI entry at 70% of the human wage raises unemployment by 4.1 percentage points (95% CI 3.5 to 4.6) and leaves 12.2 fewer humans employed (CI 10.5 to 13.9). Layoffs dominate when AI is much cheaper than humans: the layoff margin accounts for 7.2 of the lost jobs and reduced hiring for 5.0, though most dismissed workers find work again. A wider price gap reduces displacement, because cheap AI makes firms expand: at price parity, with zero dismissals, the unemployment effect is largest at 9.2 points (CI 8.6 to 9.9), all of it through hiring. That parity result survives cutting AI applications from five per period to one. Demand elasticity decides how many workers AI displaces. Screening changes who gets hired and leaves the displacement total unchanged.

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Topics: Layoff, Unemployment, Margin (machine learning), Economics, Labour economics, Wage

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