AI Could Hit Small Towns and College Areas Hardest, Research Finds

Workers in tech hubs may be better positioned to adapt to AI-related job displacement.

Published on Feb. 24, 2026

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New research from the National Bureau of Economic Research (NBER) suggests that workers in small metro areas and college towns may face greater threats of job displacement due to AI, as they have lower adaptive capacity compared to workers in tech hubs like San Jose and Seattle. Factors like liquid savings, age, location, and transferability of skills were found to influence workers' ability to manage a job loss from AI automation.

Why it matters

As AI continues to advance, understanding which workers and regions may be most vulnerable is crucial for policymakers and employers to develop strategies that support affected communities and help workers adapt to technological change.

The details

The NBER study evaluated workers' adaptive capacity by looking at factors like liquid savings, age, location (population density), and transferability of skills. Workers in professions like software and web development were found to have jobs more exposed to AI automation, but also greater ability to adapt after losing a job due to their emergency funds and skill sets. In contrast, workers in clerical and customer service roles had both high exposure to AI and lower adaptive capacity.

  • The NBER paper was published in January 2026.

The players

National Bureau of Economic Research (NBER)

A non-profit economic research organization that publishes studies on a wide range of economic topics.

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The takeaway

This research highlights the importance of policies and programs that help workers in vulnerable regions and occupations build up emergency savings, develop more transferable skills, and access job retraining opportunities to better adapt to the impacts of AI automation.