Labor Market Exposure to AI: Cross-country Differences and Distributional Implications

By Carlo Pizzinelli, Augustus J Panton, Marina Mendes Tavares, Mauro Cazzaniga, Longji Li

October 4, 2023

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Carlo Pizzinelli, Augustus J Panton, Marina Mendes Tavares, Mauro Cazzaniga, and Longji Li. Labor Market Exposure to AI: Cross-country Differences and Distributional Implications, (USA: International Monetary Fund, 2023) accessed December 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This paper examines the impact of Artificial Intelligence (AI) on labor markets in both Advanced Economies (AEs) and Emerging Markets (EMs). We propose an extension to a standard measure of AI exposure, accounting for AI's potential as either a complement or a substitute for labor, where complementarity reflects lower risks of job displacement. We analyze worker-level microdata from 2 AEs (US and UK) and 4 EMs (Brazil, Colombia, India, and South Africa), revealing substantial variations in unadjusted AI exposure across countries. AEs face higher exposure than EMs due to a higher employment share in professional and managerial occupations. However, when accounting for potential complementarity, differences in exposure across countries are more muted. Within countries, common patterns emerge in AEs and EMs. Women and highly educated workers face greater occupational exposure to AI, at both high and low complementarity. Workers in the upper tail of the earnings distribution are more likely to be in occupations with high exposure but also high potential complementarity.

Subject: Artificial intelligence, Education, Employment, Labor, Labor markets, Technology

Keywords: Artificial intelligence, Educated worker, Emerging Markets, Employment, Employment share, Exposure to AI, Impact of artificial intelligence, Labor market exposure, Labor markets, Occupations

Publication Details

Pages:

58
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2023/216
Stock No:

WPIEA2023216
ISBN:

9798400254802
ISSN:

1018-5941

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