Feeding LLM Annotations to BERT Classifiers at Your Own Risk

Using LLM-generated labels to fine-tune smaller encoder-only models for text classification has gained popularity in various settings. While this approach may be justified in simple and low-stakes applications, we conduct empirical analysis to demonstrate how the perennial curse of training on synthetic data manifests itself in this specific setup. Compared to models trained on gold labels, we observe not only the expected performance degradation in accuracy and F1 score, but also increased instability across training runs and premature performance plateaus. These findings cast doubts on the reliability of such approaches in real-world applications. We contextualize the observed phenomena through the lens of error propagation and offer several practical mitigation strategies, including entropy-based filtering and ensemble techniques. Although these heuristics offer partial relief, they do not fully resolve the inherent risks of propagating non-random errors from LLM annotations to smaller classifiers, underscoring the need for caution when applying this workflow in high-stakes text classification tasks.