Generative AI levels the playing field for workers, which paradoxically makes the wealthy asset owners even richer.
April 24, 2026
Original Paper
When AI Levels the Playing Field: Skill Homogenization, Asset Concentration, and Two Regimes of Inequality
SSRN · 6349739
The Takeaway
Generative AI levels the playing field by helping low-skill workers perform as well as their high-skill colleagues, a process called skill homogenization. While this sounds like a win for equality, it actually shifts the primary economic value toward the people who own the underlying assets and businesses. Since individual skill no longer provides a competitive edge, the rewards of productivity gains flow to the owners rather than the workers. Most people assume that democratizing skills will narrow the gap between the rich and the poor. This research suggests that when everyone is equally competent, the only thing that matters is who owns the tools.
From the abstract
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