Compsci grads facing recession-like job prospects thanks to AI

Thanks to AI, computer science majors are finding themselves in a tougher spot than they might have expected.

Jobs are harder to come by, and more graduates are ending up in lower-paying sectors like retail and food service.

That’s according to a new working paper by three US Census Bureau economists examining how college graduates from majors with the highest exposure to AI have fared since ChatGPT came onto the scene in late 2022 and helped kick off the generative AI boom.

The results don’t look good for those in the most exposed fields, with career and earnings prospects for the top decile (i.e., the top ten percent of majors most exposed to AI) looking as bad as those of older Millennials who graduated during the Great Recession.

“The most AI-exposed decile of college majors saw their likelihood of initial employment decline by five percentage points, while full-quarter initial earnings declined by 13 percent,” a trio of Census Bureau economists wrote in the paper.

“This earnings decline is comparable in magnitude to the earnings losses associated with graduating into a large recession.” And why are those earnings declining? Well, part of the answer is where the AI-affected graduates are ending up: With job prospects worsening, more are turning to lower-wage sectors like restaurants and retail, with the researchers finding that shifts into lower-paying industries account for about half of the earnings decline.

The one big difference between your usual recession and what’s happening now, the economists explain, is that the effects aren’t spread evenly across all industries.

Graduates from less AI-exposed fields, including nursing and many education fields, haven’t experienced the same deterioration in early-career employment seen among those from the most exposed majors.

Those having trouble are largely who you’d think: Graduates in computer science, mathematics, statistics, some engineering disciplines, networking, and (gulp) even journalists are among those in the most AI-exposed fields.

The impacts that young graduates are feeling have tended to ease as they move further from graduation, but previous research on those who entered the workforce around the Great Recession suggests that years of lousy job prospects can leave graduates behind the curve on earnings.

The researchers acknowledge that other factors could be at play, but the paper finds that several alternative explanations don’t fully account for the pattern.

Is there an oversupply of new graduates in those fields, given how popular they are? Probably not, the paper notes, and the authors explained to us.

“The most AI-exposed majors saw rapid growth in graduates in the years leading up to ChatGPT's release.