How Will VR and AR Impact Occupations?

Abstract

We evaluate the prospective impact of virtual and augmented reality (VR/AR, collectively termed "XR") technologies on occupations. First, we define four areas in which VR and AR technologies are leveraged. Then, we examine several case studies in which these technologies are changing the ways in which people work or interact with one other. Based on these case studies, we develop five indices that represent the levels of potential XR-enabled enhancement of human abilities and actions. Finally, we apply our results to calculate an XR impact index for 873 occupations from the O*NET database of the US Department of Labor, and we identify the 15 occupations most impacted by VR/AR technologies, which include pilots, firefighters, and healthcare workers. Implications for skill accumulation and productivity are discussed.

Keywords: VR, AR, VR/AR, XR, virtual reality, augmented reality, mixed reality, extended reality, Metaverse, labor market, jobs

JEL Classification: J00, O00