Artificial intelligence and employment: New cross-country evidence

Recent years have seen impressive advances in artificial intelligence (AI) and this has stoked renewed concern about the impact of technological progress on the labour 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 (2018[1]; 2019[2]) – 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. The indicator, which allows for variations in AI exposure across occupations, as well as within occupations and across countries, is then matched to Labour Force Surveys, to analyse the relationship with employment.Over the period 2012-2019, employment grew in nearly all occupations analysed. 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.While further research is needed to identify the exact mechanisms driving these results, one possible explanation is that partial automation by AI increases productivity directly as well as by shifting the task composition of occupations towards higher value-added tasks. This increase in labour 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 technology.