Human Capital, AI, and Labor Commoditization

Auyon Siddiq, Niuniu Zhang · arXiv · 20 Jun 2026

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Will AI destroy more jobs than it creates?
Will AI widen inequality? · its finding supports the claim (why studies differ)

Direction of the finding as read from the abstract by an AI model (AI-written).

Abstract

Has generative AI changed how labor markets value human capital? We study this question using contract-level data from Upwork, a large online labor market. We represent worker profiles with high-dimensional text embeddings, allowing us to capture rich human capital information from unstructured profile text. We then compute the predictive importance of workers' human capital information and posted hourly rates for client demand, and incorporate these measures into a difference-in-differences design around the release of ChatGPT. We find that in more AI-exposed job categories, the importance of human capital declines and the importance of price rises, suggesting a commoditization effect of AI on labor. Two additional findings support commoditization as a mechanism: The demand premium enjoyed by workers with strong human capital declines in more AI-exposed categories, and demand reallocates toward lower-priced workers. Our results have implications for the design of online labor markets, workers' incentives to invest in human capital, and labor welfare.

About this publication

Preprint. A preprint — posted publicly before or without journal peer review; findings may still be revised.

Published: 2026 (4 months ago)
Citations: Not recorded for this source

Citation counts come from OpenAlex; none are recorded for this source — absence of a count is not absence of citations.

Human Capital, AI, and Labor Commoditization

Abstract

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