Staff Discussion Notes

Gen-AI: Artificial Intelligence and the Future of Work

By Mauro Cazzaniga, Florence Jaumotte, Longji Li, Giovanni Melina, Augustus J Panton, Carlo Pizzinelli, Emma J Rockall, Marina Mendes Tavares

January 14, 2024

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Mauro Cazzaniga, Florence Jaumotte, Longji Li, Giovanni Melina, Augustus J Panton, Carlo Pizzinelli, Emma J Rockall, and Marina Mendes Tavares. "Gen-AI: Artificial Intelligence and the Future of Work", Staff Discussion Notes 2024, 001 (2024), accessed November 21, 2024, https://doi.org/10.5089/9798400262548.006

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Disclaimer: This Staff Discussion Note represents the views of the authors and does not necessarily represent IMF views or IMF policy. The views expressed herein should be attributed to the authors and not to the IMF, its Executive Board, or its management. Staff Discussion Notes are published to elicit comments and to further debate.

Summary

Artificial Intelligence (AI) has the potential to reshape the global economy, especially in the realm of labor markets. Advanced economies will experience the benefits and pitfalls of AI sooner than emerging market and developing economies, largely due to their employment structure focused on cognitive-intensive roles. There are some consistent patterns concerning AI exposure, with women and college-educated individuals more exposed but also better poised to reap AI benefits, and older workers potentially less able to adapt to the new technology. Labor income inequality may increase if the complementarity between AI and high-income workers is strong, while capital returns will increase wealth inequality. However, if productivity gains are sufficiently large, income levels could surge for most workers. In this evolving landscape, advanced economies and more developed emerging markets need to focus on upgrading regulatory frameworks and supporting labor reallocation, while safeguarding those adversely affected. Emerging market and developing economies should prioritize developing digital infrastructure and digital skills

Subject: Artificial intelligence, Economic sectors, Emerging and frontier financial markets, Financial crises, Financial markets, Income, Income inequality, Labor, National accounts, Technology

Keywords: Advanced Economies, Africa, AI adoption, AI benefit, AI exposure, AI preparedness index, Artificial Intelligence, Emerging and frontier financial markets, Emerging Market Economies, Global, ICT employment share, Income, Income Inequality, Job Displacement, Labor Market, Low-Income Developing Countries

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