Aye, What’s Happening with CompSci Graduates and AI?
Thanks to AI, those majoring in computer science are encountering challenges tougher than they anticipated. Job opportunities are dwindling, with an increasing number of graduates finding themselves in lower-paying jobs such as retail and food service. This observation comes from a recent working paper by three economists from the US Census Bureau exploring the outcomes of college graduates from disciplines most impacted by AI since the arrival of ChatGPT in late 2022, which spurred the generative AI surge.
The Great Recession Resonance
The findings are not favorable for those in the fields with the highest exposure, as career and salary prospects for the top decile (i.e., the top ten percent of majors most affected by AI) resemble those of older Millennials who graduated during the Great Recession. “The most AI-exposed decile of college majors experienced a decrease in their likelihood of initial employment by five percentage points, while their earnings for the first quarter fell by 13 percent,” the economists noted in the paper. “This decline in earnings is similar in scale to the losses encountered by graduates entering a major recession.”
What’s Causing the Wage Decline?
So, why are earnings on the decline? One reason lies in where these AI-affected graduates are finding jobs: As job prospects diminish, a larger number are resorting to lower-wage sectors like restaurants and retail. The researchers found that transitions into these lower-paying industries contribute to about half of the overall earnings drop. A significant distinction between the current situation and a typical recession, the economists elaborate, is that the repercussions are not distributed evenly across all industries. Graduates from fields less impacted by AI, such as nursing and various education disciplines, have not seen the same decline in early-career employment that those from the most exposed majors have experienced.
Who’s Experiencing Hardship?
The individuals facing difficulties are largely who one might expect: Graduates in computer science, mathematics, statistics, certain engineering fields, networking, and even journalism are among those in the most AI-affected areas. The challenges faced by young graduates have generally eased as time passes since graduation, but previous studies on those entering the job market around the Great Recession indicate that prolonged periods of poor job opportunities can hinder graduates’ earning potential.
Are There Simply Too Many Graduates? Not Quite, Mate
The researchers recognize the possibility of other influencing factors, but the paper concludes that several alternative explanations do not completely clarify the observed trend. Is there an overabundance of recent graduates in these subjects, considering their popularity? Likely not, the paper suggests, and the authors explained to us. “The most AI-exposed majors experienced a surge in graduates in the years prior to ChatGPT’s introduction. Following its release, the number of new graduates in these fields began to stabilize rapidly,” the authors detailed in an email to GadgetLad. “Survey data from STEM departments also indicates that enrollments in several of the most AI-impacted major programs have started to decline.” However, they noted that the rate at which those graduates found jobs in their field has dropped more sharply.
Alternative Routes: Graduate School or Entrepreneurship?
What about venturing into self-employment or pursuing graduate school? Collectively, variations in these options could explain as much as half of the five-percentage-point decline in employment, the paper concludes. In other terms, AI appears to influence the job landscape for young individuals, particularly those in the most AI-exposed fields, though other elements are contributing. “There are various plausible ways in which AI may be affecting early career workers,” the research team mentioned. “Companies may have opted to bring on fewer new graduates due to reasons tied to AI’s presence, not necessarily their direct implementation of the technology.”
Final Thoughts from Yours Truly
Those who are not integrating AI into their operations might simply feel less optimistic about the future or worry that AI is making it more challenging to identify suitable candidates, both of which can contribute to declining job prospects for new graduates, the economists shared with us. The essential takeaway from the entire paper is that, indeed, AI is transforming the labor market, and it’s disproportionately affecting younger individuals who pursued careers in areas being impacted by AI, such as software development and writing.
Summary: Aye, It’s All AI’s Doing, Innit?
“We should express concern regarding the significance of these findings,” the researchers conveyed, but they also expressed caution about extending this short-term trend into a long-term bleak outlook for the labor market. “Historical evidence suggests that many jobs that exist today were not around decades ago, and predicting what future jobs may arise or what skills they might require is challenging,” the authors explained. “We should exercise caution in hypothesizing about how AI will influence the wider economy based on short-term effects experienced by only a subset of workers.” Nonetheless, the current evidence indicates that new computer science graduates facing queries from their parents about why they are still preparing frappuccinos or serving tables can respond: It’s all AI’s doing.
