THE BRIEF #015 GEN AI AND THE SLOWDOWN IN ENTRY-LEVEL HIRING

IN BRIEF

One of the principal concerns around AI has been its potential to displace existing jobs. However, recent studies suggest that instead of triggering large-scale layoffs, generative AI is more likely contributing to a slowdown in the hiring of junior and entry-level positions. 

THE GIST

Throughout history, disruptive technologies have reshaped labor markets, redefining the nature of work and the skills on demand. Some innovations have automated tasks, displacing workers, while others have augmented work, meaning that rather than replacing people, they have changed the way tasks are carried out—boosting productivity and efficiency. 

Since the release of ChatGPT in 2023, debate has increased regarding how AI will impact employment. Initial concerns focused on widespread layoffs, particularly for blue-collar workers and those performing repetitive tasks. However, a 2024 IMF study highlighted that white-collar workers may be more vulnerable, as AI’s capacity to generate content, solve complex problems, and approximate human reasoning challenges traditional ideas of automation. 

Recent research provides further insights into these emerging trends. An August 2025 study by Seyed M. Hosseini and Guy Lichtinger shows a clear divergence in U.S. employment trends. From 2015 to mid-2022, junior (Entry- or Junior-level positions) and senior (Associate level and above) employment grew at similar rates. But starting in mid-2022—just as generative AI tools spread—junior employment flattened, then declined in early 2023, while senior employment continued rising. Furthermore, a widely discussed paper by Brynjolfsson, Chandar and Chen used high-frequency administrative data from the largest payroll software provider in the US to conclude that early-career workers (ages 22-25) in the most AI-exposed occupations have experienced a 13 percent relative decline in employment. These declines are concentrated in roles where AI is more likely to automate rather than augment human labor. 

THE TAKEAWAY

These recent studies highlight that AI is altering how individuals enter the workforce rather than displacing workers. For those starting their careers, the greatest challenge may not be losing a job, but gaining one in the first place. If this trend persists, it could have long-lasting effects on inequality, as a study by Guvenen et al. (2022) show that recent rises in U.S. earnings inequality are driven mainly by differences in starting wages rather than career progression. If AI disproportionately limits junior opportunities, it could have lasting consequences on upward mobility, and income inequality. 

Two aspects are worth emphasizing. First, the timeframe: while public attention on AI has grown since the release of ChatGPT, its widespread adoption in workplaces is still recent. The evidence base remains limited, and AI technology itself continues to evolve rapidly. Second, the effects of AI will not be evenly distributed across countries or sectors. Most empirical studies so far focus on high-income economies. In contrast, developing regions face different challenges. Weak digital infrastructure remains a significant obstacle, limiting the potential productivity gains from AI augmentation. Moreover, workers in formal jobs appear more exposed to automation risks than those in the informal sector, raising further questions about uneven impacts within labor markets. 

Nevertheless, these early findings provide important signals for policymakers and business leaders. Against this backdrop of uncertainty, our AI4DemocraticProsperity (AI4DP) research project is analyzing how AI can drive inclusive and sustainable growth, with the broader objective of enhancing societal prosperity. 

DELVE DEEPER

To find out more about the 2025 study that suggests that the decline in junior employment is driven primarily by reductions in hiring, read “Generative AI as Seniority-Biased Technological Change: Evidence from U.S. Resume and Job Posting Data” by Seyed M. Hosseini and Guy Lichtinger.  

This working paper by the ILO, “Generative AI and Jobs - A Refined Global Index of Occupational Exposure” written by Gmyrek et al. presents a revised study of occupational exposure to GenAI, showing that about one in four workers (24%) are in jobs with some exposure.  

Finally, do read the widely discussed Brynjolfsson et al. August 2025 paper “Canaries in the Coal Mine? Six Facts about the Recent Employment Effects of Artificial Intelligence”.