David Neumark
  • July 28, 2026

  • Two newly funded studies directed by UC Irvine economist David Neumark investigate economic impact of regulations in California and AI’s influence on employment and the tech sector

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Understanding how government regulations influence business startups in California and how artificial intelligence is transforming employment and competition in the technology sector will be the subjects of two newly funded research projects led by David Neumark, UC Irvine Distinguished Professor of Economics and co-director of the Center for Population, Inequality and Policy.

The first – supported by the Public Policy Institute of California – continues Neumark’s work on the Business Regulation and Business Starts in California report, conducted in partnership with Sarah Bohn, PPIC senior fellow and vice president and director of the Economic Policy Center.

“Regulations are hard to quantify and can vary in complexity, cost, and administration and implementation, which makes it difficult to assess their impact,” the team notes.

Initial findings draw attention not necessarily to a higher share of regulations within California vs the rest of the nation, but instead to the quantity and level of specificity and obligations embedded within state regulations as potential pain points for business starts. They also present evidence from the manufacturing industry that more permitting requirements are associated with fewer new starts. Further funding from PPIC running through June 2027 will allow the researchers to dig deeper, providing a more comprehensive perspective on regulation and deeper evidence on how those regulations affect the economy in California.

The second project, supported by the International Center for Law & Economics, focuses on the tech industry and AI using rich data on job postings and workers. The work will be done in collaboration with Nick Fucci, UC Irvine economics graduate student.

“One core question is how the diffusion of AI to different industries affects employment in those industries - both the quantity of labor demanded and the skills needed,” says Neumark. “A second core question is how dramatic changes in the allocation of AI talent across companies affects the tech sector, and in particular competition in that sector. Is there an agglomeration of AI talent in the largest companies that may disadvantage the growth of new AI firms, or is there healthy reallocation of AI workers that enables both larger and smaller companies to acquire the talent they need to innovate and grow?”

The two-year study begins this summer and will run through June 2028.

 

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