%0 Report
        %A Freund, Lukas
%A Mann, Lukas
        %T Job Transformation, Specialization, and the Labor Market Effects of AI
        %D 2026
        %8 2026 Apr
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 18565
        %U https://www.iza.org/publications/dp18565
        %X A central effect of automation is to transform jobs - shifting their task content. We develop a general-equilibrium model of this process. Occupations bundle tasks; workers possess task-specific skills and sort by comparative advantage. When a task is automated, remaining tasks gain in importance, so wage effects depend on workers’ full skill profiles. We estimate the distribution of task-specific skills and project individual-level wage effects of generative AI automation. Moderate exposure benefits workers on average but high exposure harms them, with large dispersion within occupations; the return to social skills rises, that to analytical skills falls; and low-earners gain more than high-earners. Job transformation drives these results.
        %K AI
%K bundling
%K labor markets
%K skills
%K task model