--- title: "Generative AI and Data Quality: Implications for Productivity, Labor Displacement, and Policy · AI Fault Line" url: https://aifaultline.com/research/p/doi-10-1093-rfs-hhag064/ description: "AI Fault Line is a neutral, evidence-cited field guide to why experts looking at the same developments disagree about AI's effect on productivity, jobs, inequality, regulation and the pace of change." --- [Research](https://aifaultline.com/research/) # Generative AI and Data Quality: Implications for Productivity, Labor Displacement, and Policy Zhifeng Cai · Review of Financial Studies · 11 Jul 2026 [Read original source](https://doi.org/10.1093/rfs/hhag064) Where this sits in the debate - [Will AI actually boost productivity and growth?](https://aifaultline.com/debate/productivity/) · its finding: it depends ([why studies differ](https://aifaultline.com/debate/productivity/#why)) - [Will AI destroy more jobs than it creates?](https://aifaultline.com/debate/jobs/) · its finding: it depends ([why studies differ](https://aifaultline.com/debate/jobs/#why)) - [Should governments act on AI now?](https://aifaultline.com/debate/regulation/) · its finding supports the claim ([why studies differ](https://aifaultline.com/debate/regulation/#why)) Direction of the finding as read from the abstract by an AI model ([AI-written](https://aifaultline.com/about/)). ## Abstract Abstract Generative artificial intelligence (AI) is increasingly consuming and producing huge amounts of data. We propose a social learning model of AI, emphasizing a data-AI feedback loop: data quality affects AI productivity, which influences AI adoption and, consequently, the composition (AI versus human-generated) and quality of future data. Calibrated to evidence on synthetic training loops, the model predicts hump-shaped labor dynamics—short-term displacement that partially reverses as data quality deteriorates. A Grossman–Stiglitz-style externality emerges: AI adopters free-ride on the human-generated actions that supply the novel information on which AI itself relies. In a competitive market, AI should be taxed to correct the data-quality externality; a concentrated AI industry overcorrects, making a subsidy optimal. ## About this publication **Leading field journal.** A leading journal in economics or a neighbouring field (on the Tinbergen Institute’s A list or near the top of the RePEc ranking), or a top-rated computer-science venue. Placed by: Tinbergen Institute A list. [How sources are ranked](https://aifaultline.com/about/#source-ranking). Published 2026 (3 months ago) Citations 0 (OpenAlex) 0 citations recorded by OpenAlex — too few 2026 papers in this collection for a fair comparison. [Chart: published 2026] ## More on this topic Related by theme, not necessarily by method or conclusion. - [Navigating the Jagged Technological Frontier: Field Experimental Evidence of the Effects of Artificial Intelligence on Knowledge Worker Productivity and Quality](https://aifaultline.com/research/p/doi-10-1287-orsc-2025-21838/) Organization Science · 2026 - [Navigating the Jagged Technological Frontier: Field Experimental Evidence of the Effects of AI on Knowledge Worker Productivity and Quality](https://aifaultline.com/research/p/doi-10-2139-ssrn-4573321/) SSRN · 2023 - [Generative AI at Work](https://aifaultline.com/research/p/doi-10-1093-qje-qjae044/) The Quarterly Journal of Economics · 2025 - [The Impact of AI on Developer Productivity: Evidence from GitHub Copilot](https://aifaultline.com/research/p/doi-10-48550-arxiv-2302-06590/) arXiv · 2023 Overview assembled automatically from collected metadata. [How this site is built](https://aifaultline.com/about/).