From Clerks to Agentic-AI: How will Technology Change Labor Market in Finance?
It addresses how technology impacts labor markets in finance, but is incremental as it focuses on descriptive analysis rather than novel insights.
This project studied how technology changes labor requirements in finance by tracking assets under management per employee across three technological waves, finding that it documents stylized facts without identifying causal effects.
Financial firms have gone through three major technological waves: computerization in the 1980s and 1990s, the rise of indexing and passive investing in the 2000s and 2010s, and the AI and automation wave from roughly 2015 to the present. This project studies how much labor is required to manage capital across those waves by tracking a simple productivity measure: assets under management per employee. Using a small panel of representative firms, we compare changes in AUM per employee, revenue per employee, and operating expense intensity over time. The goal is not to identify causal effects, but to document stylized facts about how technology changes the scale of asset management work.