Artificial Intelligence and the Future of Work: Evidence from Analysts

Abstract

Artificial intelligence (AI) can enhance prediction, a common task for highly-skilled workers. We examine the implications of this technological change for incumbent workers in the context of security analysts. As evidence of substitution, we find the most talented analysts quit the profession while others shift their coverage toward low-AI stocks. Analysts’ access to management gives them a soft information advantage, and they focus these meetings on low-AI stocks suggesting some complementarity. The quality of analysts’ predictions also change: analysts covering high-AI stocks exhibit increased bias and forecast errors. Additional tests suggest the change in reporting quality stems from a less talented pool of analysts rather than strategically biased predictions