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Artificial intelligence and average wages in Southern Africa: A panel VAR approach

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  • Godfred Anakpo
  • Umakrishnan Kollamparambil

Abstract

Changes in average wage are usually attributed to technological change in the past industrial revolutions. With the emergence and gradual explosion of artificial intelligence (AI) in the 4th industrial revolution, this paper applies panel vector autoregressive technique, with annual data from the World Bank and global economy from 2004 to 2017, to examine the effect of artificial intelligence on average wages in Southern Africa. Findings from the study show that artificial intelligence has a significant negative relationship with average wages but is positively associated with gross domestic product per capita (GDPC), unemployment and inflation. The study also finds inflation and GDPC to be positively associated with average wage. Based on the finding, policy direction focusing on wage stabilisation, redistribution of income, advance learning and skill development training that promote competitiveness to computerisation is recommended.

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  • Godfred Anakpo & Umakrishnan Kollamparambil, 2022. "Artificial intelligence and average wages in Southern Africa: A panel VAR approach," Development Southern Africa, Taylor & Francis Journals, vol. 39(4), pages 575-588, July.
    • Handle: RePEc:taf:deveza:v:39:y:2022:i:4:p:575-588
    DOI: 10.1080/0376835X.2021.1967111
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    Cited by:

    1. Godfred Anakpo & Zizipho Xhate & Syden Mishi, 2023. "The Policies, Practices, and Challenges of Digital Financial Inclusion for Sustainable Development: The Case of the Developing Economy," FinTech, MDPI, vol. 2(2), pages 1-17, June.

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