Is AI Reducing Employment for Software Coders?
Recent research suggests that employment of software coders has decelerated sharply since 2022, likely due to the emergence of AI tools. Analysis by Leland D. Crane and Paul E. Soto at the Board of Governors of the Federal Reserve System finds that aggregate employment of…
Intelligence analysis by Llama
The emergence of AI tools has led to a sharp deceleration in employment growth for software coders, with research suggesting that this is not due to a slowing industry but rather the impact of AI on coder employment.
Imagine you're a software coder, and you're really good at your job. But then, a new tool comes along that can do your job even better and faster. That's basically what's happening with AI tools. They're making it possible for computers to do some of the work that coders used to do, which means that there might be fewer jobs available for coders. It's like if you were a taxi driver, and then Uber came along and made it possible for people to get around without needing a taxi.
Analysis
The Data Shows a Sharp Deceleration in Employment Growth for Software Coders
The graph above shows annual employment data for 1991-2025 reported by the US Bureau of Labor Statistics. The solid blue line shows the year-over-year percent change in total employment, while the dashed green line shows the same measure but specifically for computer systems design and related services. Annual employment growth in the computer systems design industry has outpaced overall employment growth, except for two distinct periods: In 2002-2003, the industry reeled back from the dot-com buildup of the late 1990s and was exposed to the 2001 recession. After 2022, a different type of employment shock took place.
Recent Research Suggests AI Tools are the Cause of the Deceleration
Analysis by Leland D. Crane and Paul E. Soto at the Board of Governors of the Federal Reserve System finds that aggregate employment of software coders decelerated sharply after the broad public launch of generative AI tools in November 2022. The research points out that more than 30% of national coder employment is concentrated in the computer systems design and related services industry, 40% of which consists of coders. These researchers were able to establish a likely causal effect between the public launch of ChatGPT and employment by modeling a counterfactual employment scenario without any external shock and then comparing that with the actual data. This allowed them to tell the difference between an occupational shock particular to coders and a shock to the broader industry that would also impact related computer system designs jobs.
The Implications of this Research are Significant
The implications of this research are significant because it suggests that the emergence of AI tools is having a profound impact on employment in the tech industry. This has important implications for policymakers and business leaders who need to understand the potential impact of AI on employment and the economy as a whole.
Key points
- Employment of software coders has decelerated sharply since 2022.
- Recent research suggests that this job-specific shock is not caused by a slowing industry but likely from the emergence of AI tools.
- The emergence of AI tools has led to a sharp deceleration in employment growth for software coders.
- The implications of this research are significant because it suggests that the emergence of AI tools is having a profound impact on employment in the tech industry.
If the development of AI tools continues to improve, it could lead to more efficient and effective use of coders, potentially creating new job opportunities in areas such as AI development and deployment.
However, if the adoption of AI tools continues to accelerate, it could lead to a significant decline in employment for software coders, potentially displacing many workers in the industry.
