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Paper · arXiv

When AI Levels the Playing Field: Skill Homogenization, Asset Concentration, and Two Regimes of Inequality

Generative AI compresses within-task skill differences while shifting economic value toward concentrated complementary assets, creating an apparent paradox: the technology that equalizes individual performance may widen aggregate inequality. We formalize this tension in a task-based model with endogenous education, employer screening, and heterogeneous firms. The model yields two regimes whose boundary depends on AI's technology structure (proprietary vs. commodity) and labor market institutions (rent-sharing elasticity, asset concentration). A scenario analysis via Method of Simulated Moments, matching six empirical targets, disciplines the model's quantitative magnitudes; a sensitivity ...

AuthorsXupeng Chen, Shuchen Meng
Primary categorycs.LG
Published5 March 2026
Last updated at source9 March 2026
cs.LGcs.AI
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