Traditional Theories VS Generative AI's Labor Market Impact

Tianyu Han

doi:10.54254/2754-1169/2025.LD28494

Advances in Economics, Management and Political SciencesOpen access

Traditional Theories VS Generative AI's Labor Market Impact

Research Article

Open Access

Traditional Theories VS Generative AI's Labor Market Impact

Tianyu Han ^1*

¹ Sage Hill School

^*Corresponding author: tedhan1369@gmail.com

Published on 22 October 2025

AEMPS Vol.230

ISSN (Print): 2754-1177

ISSN (Online): 2754-1169

ISBN (Print): 978-1-80590-453-3

ISBN (Online): 978-1-80590-454-0

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Abstract

This paper examines how generative AI is influencing the future of work from both historical and current viewpoints. By reviewing past technological disruptions like electrification and the computer revolution, we demonstrate how innovation often causes both job losses and job creation. Generative AI differs from previous changes because it not only automates physical tasks but also handles complex, cognitive, and even creative work. The paper explores which types of jobs are most vulnerable, which new roles are emerging, and how companies, workers, and policymakers should respond. Through case studies in the investment advisory sector, we show how AI tools such as FinChat and Wealthfront are transforming job functions. The paper concludes with recommendations on preparing for a rapidly changing labor market, emphasizing the importance of human skills, training, and inclusive policies.

Keywords:

Generative AI, labor market, skill-biased change, workforce transition

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References

[1]. Carol M. Kopp(2025) Understanding Creative Destruction: Driving Innovation and Economic Change https: www.investopedia.com/terms/c/creativedestruction.asp/

[2]. Mark Dodgson, David Gann(2010) Joseph Schumpeter 's Gales of Creative Destruction. https: academic.oup.com/book/494/chapter-abstract/135261060?redirectedFrom=fulltext/

[3]. Daron Acemoglu(2002).Technical Change, Inequality, and the Labor Market.https: //www.aeaweb.org/articles?id=10.1257%2F0022051026976

[4]. Hartley, Jonathan and Jolevski, Filip and Melo, Vitor and Moore, Brendan, The Labor Market Effects of Generative Artificial Intelligence (December 18, 2024), https: //papers.ssrn.com/sol3/papers.cfm?abstract_id=5136877

[5]. Rick Merritt.(2025). What Is Retrieval-Augmented Generation, aka RAG?.https: blogs.nvidia.com/blog/what-is-retrieval-augmented/generation/#: ~: text=Getting%20the%20best%20performance%20for, least%20to%20the%20early%201970s.

[6]. Humza Naveed, Asad Ullah Khan, Shi Qiu, Muhammad Saqib, Saeed Anwar, Muhammad Usman, Naveed Akhtar, Nick Barnes, Ajmal Mian(2024). AComprehensive Overview of Large Language Models. https: //arxiv.org/pdf/2307.06435

[7]. Michael Klesel, H. Felix Wittmann(2025).Retrieval-Augmented Generation (RAG). https: //link.springer.com/article/10.1007/s12599-025-00945-3

[8]. Daron Acemoglu, Pascual Restrepo(2020).Unpacking Skill Bias: Automation and New Tasks. https: //www.nber.org/papers/w26681

[9]. The Investopedia Team.(2025) How Robo-Advisors Use Tax-Loss Harvesting to Boost Your Returns.https: www.investopedia.com/terms/r/robo-tax-loss-harvesting.asp/

References

[1]. Carol M. Kopp(2025) Understanding Creative Destruction: Driving Innovation and Economic Change https: www.investopedia.com/terms/c/creativedestruction.asp/

[2]. Mark Dodgson, David Gann(2010) Joseph Schumpeter 's Gales of Creative Destruction. https: academic.oup.com/book/494/chapter-abstract/135261060?redirectedFrom=fulltext/

[3]. Daron Acemoglu(2002).Technical Change, Inequality, and the Labor Market.https: //www.aeaweb.org/articles?id=10.1257%2F0022051026976

[7]. Michael Klesel, H. Felix Wittmann(2025).Retrieval-Augmented Generation (RAG). https: //link.springer.com/article/10.1007/s12599-025-00945-3

[8]. Daron Acemoglu, Pascual Restrepo(2020).Unpacking Skill Bias: Automation and New Tasks. https: //www.nber.org/papers/w26681

[9]. The Investopedia Team.(2025) How Robo-Advisors Use Tax-Loss Harvesting to Boost Your Returns.https: www.investopedia.com/terms/r/robo-tax-loss-harvesting.asp/

Cite this article

Han,T. (2025). Traditional Theories VS Generative AI's Labor Market Impact. Advances in Economics, Management and Political Sciences,230,12-19.

Data availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

About volume

Volume title: Proceedings of ICFTBA 2025 Symposium: Strategic Human Capital Management in the Era of AI

ISBN: 978-1-80590-453-3(Print) / 978-1-80590-454-0(Online)

Editor: Lukáš Vartiak, An Nguyen

Conference website: https://www.icftba.org/London.html

Conference date: 4 November 2025

Series: Advances in Economics, Management and Political Sciences

Volume number: Vol.230

ISSN: 2754-1169(Print) / 2754-1177(Online)

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