AI exposure predicts unemployment risk: A new approach to technology-driven job loss

Is AI disrupting jobs and creating unemployment? This question has stirred public concern for job stability and motivated studies assessing occupations' automation risk. These studies used readily available employment and wage statistics to quantify occupational changes for employed workers. However, they did not directly examine unemployment dynamics primarily due to the lack of data across occupations, geography, and time. Here, we overcome this barrier using monthly occupation-level unemployment data from each US state's unemployment insurance office from 2010 to 2020 to assess AI exposure models, job separations, and unemployment through a new measure called unemployment risk. We demonstrate that standard employment statistics are inadequate proxies for occupations' unemployment risk and find that individual AI exposure models are poor predictors of occupations' unemployment risk states' total unemployment rates, and states' total job separation rates. However, an ensemble approach exhibits substantial predictive power, accounting for an additional 18% of variation in unemployment risk across occupations, states, and time compared to a baseline model that controls for education, occupations' skills, seasonality, and regional effects. These results suggest that competing models may capture different aspects of AI exposure and that automation shapes US unemployment. Our results demonstrate the power of occupation-specific job disruption data and that efforts using only one AI exposure score will misrepresent AI's impact on the future of work.