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

Generative artificial intelligence (GenAI) is the first automation wave to reach high-cognitive tasks at scale, yet its effects on intra-urban inequality remain largely unknown. Using 5 million job postings from Beijing (2018--2024), we construct a neighborhood-level GenAI Exposure Index by aggregating task-level assessments from five leading large language models. We examine the spatial, structural and causal mechanisms of this shock. We find that GenAI exposure is highly concentrated in the city's core districts, deepening the intra-urban AI divide. Since 2023, high-exposure neighborhoods have experienced wage stagnation even as they continue to attract high-skilled workers -- a "high-skill trap." This wage penalty is driven by task de-skilling and intensified labor-market crowding. A difference-in-differences design centered on ChatGPT's release supports a causal interpretation. These findings challenge the prevailing theory of skill-biased technological change and provide a basis for inclusive AI governance in global technology hubs.

Generative Artificial Intelligence (AI) tools are rapidly adopted in the workplace and in education, yet the empirical evidence on AI's impact remains mixed across different operating contexts. We propose a model of human-AI interaction to better understand and analyze several mechanisms by which AI affects productivity. In our setting, human agents with varying skill levels exert utility-maximizing effort to produce certain task outcomes with AI assistance. We find that incorporating endogeneity in skill development or AI unreliability can induce a productivity paradox: increased levels of AI assistance may degrade productivity, leading to potentially significant shortfalls. We construct interpretable measures that characterize when the productivity paradox occurs. Moreover, we examine the long-term distributional effect of AI on skill, and demonstrate that skill polarization can emerge in steady state. We identify an effort-skill non-monotonicity condition under which skill polarization emerges.

Generative Artificial Intelligence (GenAI) is transforming how firms create, process, and apply knowledge, yet little is known about the heterogeneity of its productivity effects across users. We report results from a randomized controlled experiment in which participants-analogs of early-career knowledge workers-were assigned to self-study a technical domain using either traditional resources or large-language-model (LLM) assistance. On average, GenAI access significantly increased task performance, but the distribution of gains was highly uneven. Improvements were not predicted by GPA or prior knowledge, but by AI Interaction Competence (AIC) -- the ability to elicit, filter, and verify model outputs. High-AIC participants realized outsized gains; low-AIC participants saw limited or even negative marginal returns. A scaffolding intervention (conceptual maps) reduced outcome variance, indicating that standardized workflows can mitigate inequality in AI-mediated performance. We interpret these findings through the lens of human-AI complementarities: GenAI raises mean productivity while introducing a new axis of capability inequality. Managerially, firms should pair GenAI access with short AIC micro-training and simple standard operating procedures to capture value consistently and avoid uneven adoption outcomes.