AI Impact on Freelance: Study Finds Some Jobs Down by 21% Since ChatGPT Debut

Since the debut of ChatGPT and other generative AI models in November 2022, the freelance job market has experienced significant shifts. One study recently analyzed AI's Impact on the Freelance industry, these were their findings.

AI Impact on Freelance Study

In a recent study entitled “Who is AI Replacing: The Impact of Generative AI on Online Freelancing Platforms”, researchers from Harvard Business School, the German Institute for Economic Research, and the Imperial College Business School identified a decline of up to 21% in the number of freelance jobs posted on platforms like Upwork and Fiverr in areas where generative AI excels. This trend underscores the impact of AI on the freelance job market, particularly for roles that involve routine and repetitive tasks.

“We find that the number of job posts for automation-prone jobs decreased by 20.86% or more than manual-intensive jobs within eight months after the introduction of ChatGPT,” reads the study. “This decline indicates a significant drop in demand for freelancer jobs involving more repetitive tasks (e.g., writing), coding and automation.”

The industries that experienced the greatest decline in job availability were:

• Writing: 30.27% decrease
• Software, Website & App Development & Engineering: 20.62% decrease
• Engineering: 10.62%

The study also analyzed the impact of the release of image-generating AI technologies and found an additional decline in job postings in industries such as:

• Graphic Design: 18.49% decrease
• 3D modeling: 15.57% decrease

Rise in High-Value Freelance Pay

The study also noted that the number of remaining automation prone jobs are those of greater complexity, and higher pay – and that pay is, overall, on the rise.

And according to a recent study by Upwork,  pay for these higher value jobs, or jobs or greater complexity in their respective fields, is, overall, on the rise.

The study found the following industries have experienced notable increases in high-value job postings since ChatGPT’s debut:

• Admin Support: 9% increase
• IT & Networking: 7% increase
• Design & Creative: 4% increase
• Web, Mobile, and Software Development: 6% increase
• Accounting & Consulting: 7% increase
• Legal: 6% increase
• Data Science & Analytics: 9% increase
• Engineering & Architecture: 8% increase

These statistics highlight a shift towards more complex and specialized freelance roles, which are less susceptible to automation by AI technologies.

However, it’s important to consider the context of these increases against the backdrop of rising inflation. Since 2022, U.S. inflation has been approximately 7.3%. Therefore, some of these increases in freelance job postings may merely be keeping pace with inflation, rather than indicating a true growth in demand.

Decline in Low-Value Freelance Jobs

Conversely, the following industries saw the most notable decrease in pay for low-value jobs, or jobs that can be easily automated, since the rise of ChatGPT”

• Writing: 19% decrease
• Translation: 10% decrease
• Sales & Marketing: 8% decrease
• Customer Service: 7% decrease

These figures align with the findings of the “Who is AI Replacing” study and further illustrate the impact of AI on jobs that involve routine and easily automated tasks.

Broader Implications

Economists often assert that AI will automate certain tasks but is unlikely to eliminate many jobs, as most roles encompass broader and more complex responsibilities. However, the freelance workforce, which constituted 38% of Americans in 2022 according to an Upwork study, faces unique challenges. For many freelancers, their work involves tasks that are directly susceptible to automation by AI, potentially jeopardizing their livelihoods.

Source: Demirci, Ozge and Hannane, Jonas and Zhu, Xinrong, Who Is AI Replacing? The Impact of Generative AI on Online Freelancing Platforms (October 15, 2023). Available at SSRN: https://ssrn.com/abstract=4602944 or http://dx.doi.org/10.2139/ssrn.4602944