Search papers, labs, and topics across Lattice.
This paper analyzes the impact of technological advancements on labor productivity in the financial industry by tracking assets under management (AUM) per employee across three waves: computerization, passive investing, and AI/automation. The study documents changes in AUM per employee, revenue per employee, and operating expense intensity using a panel of representative firms. The findings provide stylized facts about how technology reshapes the scale of asset management work, showing trends but not claiming causal effects.
The rise of AI in finance hasn't necessarily translated to lower operating expenses, suggesting a more complex relationship between technology and labor than simple automation.
Financial firms have gone through three major technological waves: computerization in the 1980s and 1990s, the rise of indexing and passive investing in the 2000s and 2010s, and the AI and automation wave from roughly 2015 to the present. This project studies how much labor is required to manage capital across those waves by tracking a simple productivity measure: assets under management per employee. Using a small panel of representative firms, we compare changes in AUM per employee, revenue per employee, and operating expense intensity over time. The goal is not to identify causal effects, but to document stylized facts about how technology changes the scale of asset management work.
