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The relationship between Artificial Intelligence (AI) exposure and returns to education

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  • Madoń Karol

    (SGH Warsaw School of Economics, Al. Niepodległości 162, 02-554 Warsaw, Poland; Institute for Structural Research (IBS), Irysowa 18c, 02-660 Warsaw, Poland)

Abstract

This paper studies the relationship between exposure to artificial intelligence (AI) and workers’ wages across European countries. Overall, a positive relationship between exposure to AI and workers’ wages is found, however it differs considerably between workers and countries. High-skilled workers experience far higher wage premiums related to AI-related skills than middle- and low-skilled workers. Positive associations are concentrated among occupations moderately and highly exposed to AI (between the 6th and 9th decile of the exposure), and are weaker among the least exposed occupations. Returns of AI-related skills among high-skilled workers are even higher in Eastern European Countries compared to Western European countries. The heterogeneity likely originates from the difference in overall labour costs between country groups. The results presented in this study were obtained from the estimation of Mincerian wage regressions on the 2018 release of the EU Structure of Earning Survey.

Suggested Citation

  • Madoń Karol, 2024. "The relationship between Artificial Intelligence (AI) exposure and returns to education," Central European Economic Journal, Sciendo, vol. 11(58), pages 1-14.
    • Handle: RePEc:vrs:ceuecj:v:11:y:2024:i:58:p:14:n:1001
    DOI: 10.2478/ceej-2024-0029
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    References listed on IDEAS

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    2. Sahling, Leonard G & Smith, Sharon P, 1983. "Regional Wage Differentials: Has the South Risen Again?," The Review of Economics and Statistics, MIT Press, vol. 65(1), pages 131-135, February.
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    More about this item

    Keywords

    artificial intelligence; wages; technological change; Europe;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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