Is AI reducing employment for software coders?

The takeaway

Employment of software coders has decelerated sharply since 2022. Recent research suggests this job-specific shock isn’t caused by a slowing industry but likely from the emergence of AI tools.

What employment data show

Our FRED graph above shows annual employment data for 1991-2025 reported by the US Bureau of Labor Statistics: The solid blue line shows the year-over-year percent change in total employment. The dashed green line shows the same measure but specifically for computer systems design and related services.

Annual employment growth in the computer systems design industry has outpaced overall employment growth, except for two distinct periods:

• In 2002-2003, the industry reeled back from the dot-com buildup of the late 1990s and was exposed to the 2001 recession.
• After 2022, a different type of employment shock took place.

What recent research shows

Analysis by Leland D. Crane and Paul E. Soto at the Board of Governors of the Federal Reserve System finds that aggregate employment of software coders decelerated sharply after the broad public launch of generative AI tools in November 2022.

The research points out that more than 30% of national coder employment is concentrated in the computer systems design and related services industry, 40% of which consists of coders.

These researchers were able to establish a likely causal effect between the public launch of ChatGPT and employment by modeling a counterfactual employment scenario without any external shock and then comparing that with the actual data. This allowed them to tell the difference between an occupational shock particular to coders and a shock to the broader industry that would also impact related computer system designs jobs.

To learn more about this topic, check this earlier FRED Blog post on the sharp decrease in job postings in the broader tech industry.

How this graph was created: Search FRED for “All Employees, Computer Systems Design and Related Services”. Click the “Edit Graph” button and select the “Add Line” tab to search for “All Employees, Total Nonfarm.” Don’t forget to click “Add data series.” For both selected series, change the units to “Percent Change, Annual,” with the aggregation method as “End of Period.” Last, change the date range to start in 1991-01-01.

Suggested by Maria Goffinet, Elena Roussanova, and Diego Mendez-Carbajo.