What Happened
A new U.S. Census Bureau study finds an unprecedented worsening in outcomes since ChatGPT's launch for graduates from the U.S. college majors most exposed to AI. We are not generally fans of such studies, since they can be methodologically slippery, but this was strong work.
Since the launch of ChatGPT in late 2022, graduates from the most AI-exposed decile of academic majors have seen their probability of initial employment fall by about 5 percentage points, while their initial quarterly earnings have fallen 13%, relative to graduates from less-exposed majors. Roughly half the earnings decline comes from lower pay within industries, with the rest coming from graduates being pushed into lower-wage sectors such as retail and restaurants.
What It Means
The literature generally puts the initial earnings penalty from entering the labor market during a severe recession at roughly 9–10%. So, for the most exposed majors, the post-ChatGPT earnings shock is arguably larger than the normal first-year effect of graduating into a major recession.