Goldman Sachs Economists Say Labor Market Mismatch Has Fallen Below Pre-Pandemic Level

Goldman Sachs economists Elsie Peng and Ronnie Walker stated in a research note published Thursday that the mismatch between workers and available jobs has declined from its 2022 peak and is now slightly below its pre-pandemic level. The economists used a version of the Lazear-Spletzer mismatch index, which measures the share of job seekers who would need to be reallocated across occupations to equalize labor market tightness.

They found that AI deployment coincided with existing shortages in the most AI-exposed occupations, such as information clerks, secretaries, and sales representatives.

U.S. job openings has changed since 2019. Openings in health care, food preparation, and maintenance have risen by roughly 300,000, while openings in office roles have fallen by about 450,000. A one-standard-deviation increase in an occupation's exposure to AI substitution is associated with 12% fewer job openings relative to that occupation's 2019 average, according to the Goldman analysis.

Economists at the New York Fed published a separate analysis the same day. They concluded that overall AI exposure shows little link to declining job postings and that the drop in postings for high-exposure roles predated the launch of ChatGPT. Peng and Walker wrote that the next stage of AI deployment will likely require more adaptation by the workforce, particularly for younger workers and career changers entering roles that require credentials or physical presence.