Federal Reserve Bank of Dallas

The Federal Reserve Bank of Dallas is the regional central bank for the Eleventh Federal Reserve District, covering Texas, northern Louisiana, and southern New Mexico. It conducts original economic research with particular strength in energy economics, labour markets, and regional economic conditions. In 2026, two Dallas Fed research papers provided some of the most granular empirical evidence on how AI exposure affects employment outcomes by age group. The first found that employment fell approximately 1% in the top 10% of AI-exposed industries while the broader economy added jobs, with the decline concentrated on workers under 25 through collapsed job-finding rates rather than increased separations.

A second Dallas Fed paper distinguished between 'codified knowledge' — textbook material that AI can readily replicate — and 'tacit knowledge' — hands-on experience that is harder to automate. It found returns to experience are rising in AI-exposed occupations, meaning that while entry-level workers face compressed opportunities, experienced workers in the same sectors may be seeing wage gains. This nuance complicates the simple displacement narrative: AI is simultaneously aiding and replacing workers, with outcomes diverging sharply by seniority level. related event

The Dallas Fed's under-25 finding is particularly significant because it identifies the mechanism of displacement: not mass redundancy but structural non-entry. Young workers cannot find the first jobs that would allow them to accumulate tacit knowledge, while experienced workers are protected or even rewarded. If sustained, this pattern implies a permanent compression of the entry-level labour market for a full cohort of workers who will carry permanently lower earnings and career trajectories.