Artificial intelligence and labor market outcomes

AI has created new jobs to meet digital and automation needs, and those equipped with AI capital enjoy increased employment and wages.

Anglia Ruskin University, UK, and IZA, Germany

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Artificial intelligence (AI) has streamlined processes, improved workforce allocation, and created new jobs to meet the needs of digitalization and automation. Individuals with AI capital experience greater employment opportunities and higher wages, particularly in high-skilled roles and large firms. Training in AI helps reduce gender-based digital disparities, empowers individuals, and enhances their employability. Policymakers should promote inclusive AI development policies to prevent widening AI-related divides and unemployment, and to ensure equitable opportunities.

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Hallazgos clave

Pros

Investments in education and skills related to AI have boosted employment, particularly in high-skilled occupations.

AI adoption has led to higher demand for AI-related skills and wage premiums, especially in high-skilled occupations.

AI has increased employee productivity for less-experienced and lower-skilled employees.

AI helps industries weather economic downturns by stabilizing employment levels.

AI enhances job quality for historically disadvantaged groups by reducing reliance on physical strength and promoting cognitive skills.

Contras

AI increases job displacement risks for low-skilled, routine employees, widening the gap between high- and low-skilled employees.

AI-investing firms favor highly educated employees, reducing non-degree roles and some non-technical jobs.

AI might worsen income inequality, especially impacting low-skilled employees.

Employees’ distrust of workplace AI stems from perceiving AI as a threat and dissatisfaction with overpromised AI capabilities.

There are concerns about AI's ethics and transparency, especially in decision-making processes.

Mensaje principal de los autores

AI is reshaping the labor market by creating new jobs and increasing competition for high-skilled roles, benefiting those with AI capital. While AI may boost productivity in certain jobs, it also widens the gap between high- and low-skilled employees. Less-educated employees face higher risks of displacement and reduced income. Additionally, AI introduces challenges related to workforce adaptability, trust, ethics, and transparency, which negatively impact employees' job realities. Policymakers should navigate these changes to maximize the benefits of AI while mitigating its adverse effects.

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