Gen AI Shrinks Junior Startup Jobs

A causal study finds that after ChatGPT's release, startups with high pre‑release exposure to generative‑AI tasks cut junior and implementation roles within two quarters, while increasing productivity and accelerating financing. Venture capital shifted toward more frequent, smaller investments, boosting new‑firm formation that offset aggregate job losses but concentrated employment in senior roles. Displaced junior workers faced longer unemployment and moved to lower‑paying, less‑exposed jobs. — If generative AI quickly hollow outs entry‑level startup jobs while changing VC incentives, policymakers need targeted re‑training, unemployment supports, and adjustments to startup labor and financing regulations to manage inequality and labor transitions.