Artificial Intelligence and Employment: New Cross-Country Evidence

Abstract

Recent years have seen impressive advances in artificial intelligence (AI) and this has stoked renewed concern about the impact of technological progress on the labor market, including on worker displacement. This paper looks at the possible links between AI and employment in a cross-country context. It adapts the AI occupational impact measure developed by Felten, Raj and Seamans—an indicator measuring the degree to which occupations rely on abilities in which AI has made the most progress—and extends it to 23 OECD countries. Overall, there appears to be no clear relationship between AI exposure and employment growth. However, in occupations where computer use is high, greater exposure to AI is linked to higher employment growth. The paper also finds suggestive evidence of a negative relationship between AI exposure and growth in average hours worked among occupations where computer use is low. One possible explanation is that partial automation by AI increases productivity directly as well as by shifting the task composition of occupations toward higher value-added tasks. This increase in labor productivity and output counteracts the direct displacement effect of automation through AI for workers with good digital skills, who may find it easier to use AI effectively and shift to non-automatable, higher-value added tasks within their occupations. The opposite could be true for workers with poor digital skills, who may not be able to interact efficiently with AI and thus reap all potential benefits of the technology1.

The Effects of AI on the Working Lives of Women

“…Further, AI can be used to automate nonroutine tasks of highly skilled workers. Therefore, jobs that once seemed beyond the scope of automation are now more commonly automated using AI systems (Georgieff & Hyee, 2021).…”

“…AI-driven automation is distinct from traditional automation in that it can carry out more complex tasks. This makes AI systems more prone to replace highly skilled, non-routine jobs (Georgieff & Hyee, 2021). AI systems often carry out specific and limited tasks within the workplace.…”

“…Therefore, some could argue that AI favours highly educated workers in jobs less likely to be automated because they entail a high proportion of tasks involving expertise and social interactions (Agar et al, 2018). However, as AI systems become more effective and accurate, non-routine tasks and jobs that once seemed 'safe' from automation are exposed to automation through AI systems (Georgieff & Hyee, 2021).…”

“…3 Therefore, AI-driven automation can create new opportunities for work. For example, AI technologies can shift workers away from repetitive and time-consuming tasks towards more productive and engaging tasks (Georgieff & Hyee, 2021). This section discusses the effect of AI on women's skill requirements in relation to three AI-induced shifts:…”

Inclusive Growth in the Era of Automation and AI: How Can Taxation Help?

“…The final effect will depend on which effect will dominate. Georgieff and Hyee ( 2021 ) find that task substitution dominates only for workers with low digital skills, while productivity effects dominate for workers with good digital skills. In addition, the final effect also depends on the adaptability of jobs in the digital transformation (Arntz et al, 2017 ).…”