How Might AI Shape the Future of Work?

Artificial intelligence (AI), once regarded as science fiction, is now a part of everyday life, with people turning to ChatGPT and other AI assistants for help with everything from drafting emails to planning vacations. But as AI spreads, fundamental questions on how this technology might reshape the nature of work loom.

Economists foresee slow, steady changes, viewing AI as another capital investment to help workers be more productive. By contrast, tech experts predict explosive growth—“a singularity”—when humans are replaced by AI.

Now, Penn’s Konrad Kording, a computer scientist, and Ioana Marinescu, an economist, have developed an interactive model that incorporates assumptions from both camps to generate meaningful predictions about how AI will affect wages, jobs, and the overall economy. Their work is published in Brookings.

Konrad Kording and Ioana Marinescu.
Image: Eric Sucar (left) and Carson Easterly (right)

“Economists and computer scientists have been talking past each other on this for years,” says Penn Integrates Knowledge (PIK) University Professor Kording. “The model gives them a shared language to make their disagreements explicit.”

The model expands the traditional framework of dividing the economy into labor and capital, further categorizing each into two sectors: intelligence tasks and physical tasks. This allowed the researchers to capture the effects of the slow-moving physical piece and the fast-moving virtual intelligence piece—AI—on the future of the economy.

What their model demonstrated was how intelligence saturation—the idea that additional increases in intelligence yield diminishing benefits when physical inputs remain constant—fundamentally constrains AI’s long-term economic impact.

“If I give you a task to restack all of the books onto the table, it is going to take you a certain amount of time,” explains Kording, a professor of neuroscience in the Perelman School of Medicine and of bioengineering in the School of Engineering and Applied Science. “Imagine that you are more intelligent than you already are—could you restack the books faster? Probably. But there’s a certain minimal time that it takes you to restack the books with your hands. That’s intelligence saturation.”

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