A new study published by Stanford University has found that the “AI revolution” is already having a significant and disproportionate impact on entry-level workers in the US labor market, particularly those aged 22 to 25. The research analyzed high-frequency payroll records from millions of American workers and revealed a 13% relative decline in employment for early-career workers in AI-exposed professions since the widespread adoption of generative-AI tools.
The study’s findings suggest that experience and tacit knowledge are becoming crucial buffers against displacement as AI tools excel at replacing book learning over job-specific, hard-to-codify skills. The report states that entry-level workers are being hit hardest, with substantial declines in employment, especially for those in software engineering and customer service.
However, the study also notes that not every use case for AI is leading to a decline in employment. Automation in fields where AI substitutes for labor has a more significant impact on employment than augmentation, which complements work. The authors found that occupations with mainly augmentative AI applications have not seen similar declines in entry-level hires.
The Stanford team argues that their analysis rules out several other explanations, such as COVID-era disruptions or interest rate shocks, and find a decline in relative employment for the most AI-exposed quintiles compared to the least exposed quintile. The effects are not limited to computer-related jobs and are largely driven by decreased employment rather than lower wages.
The study provides some of the first direct empirical evidence that AI is shifting job opportunities away from America’s entry-level workers, particularly those aged 22 to 25. While the findings are early, they confirm that something is indeed happening in the labor market, and the impact of AI on employment is already being felt.
Source: https://fortune.com/2025/08/26/stanford-ai-entry-level-jobs-gen-z-erik-brynjolfsson