Discussion Paper

AI Adoption and Employment Expectations: Evidence from a Survey of Small Business Owners

Abstract: There is little consensus on the effect of AI adoption on employment. Economy-wide measures of pay and headcount have moved little even as AI adoption has spread rapidly, yet narrower measures document declining hiring for workers at the start of their careers or in AI-exposed occupations. In this post, we revisit this topic for U.S. small businesses. We use data from the 2025 Small Business Credit Survey (SBCS) to examine the twelve-month-forward employment and revenue expectations of AI users. We find that firms currently using AI are significantly more likely than non-users to expect increased employment and revenues over the next year, even after accounting for firm and owner characteristics and location. Revenue expectations are most optimistic for AI users that report facing operational challenges in utilizing technology.

JEL Classification: O3; L2; D2;

https://doi.org/10.59576/lse.20261008

Bibliographic Information

Provider: Federal Reserve Bank of New York

Part of Series: Liberty Street Economics

Publication Date: 2026-10-08

Number: 20261008