Impact of GenAI on Job Market Influences Economic Views and Actions – Insights for Employers Regarding Employment Trends
In a recent study, the anticipated job replacement rates due to generative AI (GenAI) were found to be higher among users in the United States compared to non-users, by about 5 percentage points. This trend was observed amidst a broader examination of how worker expectations about GenAI can shape economic outcomes in both Japan and the US.
The study, which employed expert forecasts as an instrumental variable to address concerns about endogeneity in belief formation, highlighted some intriguing differences between the two countries. For instance, in Japan, belief updates about GenAI led to higher expectations for inflation and investment, particularly among high-income and creative workers. In contrast, in the US, GenAI was found to enhance the productivity of lower-skill workers, as shown by investment expectations diverging by education.
As of April 2025, just 0.16% of all Japanese job postings mentioned any of a suite of GenAI-related keywords, compared to 0.26% of US job postings. However, Japanese workers showed a notable increase in their willingness to use GenAI at work when shown data suggesting potentially higher job replacement risks.
In both countries, people with higher levels of education tended to anticipate lower levels of job replacement. Interestingly, college-educated respondents in the US reacted most strongly. A 1-point increase in expected displacement led to an 8.3-point drop in labor demand expectations and a 9.1-point drop in skill requirements.
Exposure to expert opinions about GenAI's potential labor market impact was found to sway people's views in both Japan and the US. In the US, average expectations for inflation or growth showed little change, but college-educated respondents showed stronger reactions in other areas. On the other hand, in Japan, heightened expectations about GenAI job replacement mildly increased inflation expectations.
Looking ahead, both Japanese and US workers expect generative AI to create new job categories such as "AI artists," "prompt designers," and specialists in generative AI, with widespread impact in creative industries, cultural, and museum institutions through personalized and interactive experiences. In April 2025, companies like Artprice in Japan were prominently involved in GenAI-related job offerings, driving innovation in AI applications for art and culture.
Private use of GenAI was more common in the US (69%) than in Japan (31%). High-income respondents, defined as those earning over 10 million JPY annually in Japan or over 100,000 USD annually in the United States, were found to be more likely to use GenAI.
The study also examined various heterogeneities, including gender, age, income, education, and whether the respondent was in a creative occupation. In the online survey, creative occupations were defined as jobs involving one or more of the following domains: web and internet services; gaming and multimedia; advertising, graphic design, publishing, and printing; video, audio, events, entertainment, television, and broadcasting; and fashion, interior, spatial, and product design.
Interestingly, Japanese workers may need extra reassurance that AI is meant to support, not replace, their roles. Highly educated workers in the US, on the other hand, were found to be more concerned about job replacement and may require additional support to adapt to the changes brought about by GenAI.
In conclusion, the study provides valuable insights into how generative AI could reshape the job market and economic outcomes in Japan and the US. As we move forward, it is crucial to continue monitoring these trends and exploring ways to ensure a smooth transition for all workers.
