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Economics of Artificial Intelligence: Implications for the Future of Work

Author

Listed:
  • Ernst Ekkehardt

    ()

  • Merola Rossana

    ()

  • Samaan Daniel

    () (Research Department, International Labour Organisation, Route des Morillons 4, 1211Geneva, Switzerland)

Abstract

The current wave of technological change based on advancements in artificial intelligence (AI) has created widespread fear of job loss and further rises in inequality. This paper discusses the rationale for these fears, highlighting the specific nature of AI and comparing previous waves of automation and robotization with the current advancements made possible by a widespread adoption of AI. It argues that large opportunities in terms of increases in productivity can ensue, including for developing countries, given the vastly reduced costs of capital that some applications have demonstrated and the potential for productivity increases, especially among the low skilled. At the same time, risks in the form of further increases in inequality need to be addressed if the benefits from AI-based technological progress are to be broadly shared. For this, skills policies are necessary but not sufficient. In addition, new forms of regulating the digital economy are called for that prevent further rises in market concentration, ensure proper data protection and privacy, and help share the benefits of productivity growth through the combination of profit sharing, (digital) capital taxation, and a reduction in working time. The paper calls for a moderately optimistic outlook on the opportunities and risks from AI, provided that policymakers and social partners take the particular characteristics of these new technologies into account.

Suggested Citation

  • Ernst Ekkehardt & Merola Rossana & Samaan Daniel, 2019. "Economics of Artificial Intelligence: Implications for the Future of Work," IZA Journal of Labor Policy, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 9(1), pages 1-35, June.
  • Handle: RePEc:vrs:izajlp:v:9:y:2019:i:1:p:35:n:4
    DOI: 10.2478/izajolp-2019-0004
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    File URL: https://doi.org/10.2478/izajolp-2019-0004
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    Citations

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    Cited by:

    1. Ivanov, Stanislav Hristov & Webster, Craig & Stoilova, Elitza & Slobodskoy, Daniel, 2020. "Biosecurity, crisis management, automation technologies, and economic performance of travel, tourism and hospitality companies – a conceptual framework," SocArXiv 2hx6f, Center for Open Science.
    2. José L. Torres & Pablo Casas, 2020. "Automation, Automatic Capital Returns, and the Functional Income Distribution," Working Papers 2020-02, Universidad de Málaga, Department of Economic Theory, Málaga Economic Theory Research Center.
    3. Narasimha D. Reddy, 0. "Future of Work and Emerging Challenges to the Capabilities of the Indian Workforce," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 0, pages 1-26.
    4. Naudé, Wim, 2020. "From the Entrepreneurial to the Ossified Economy: Evidence, Explanations and a New Perspective," GLO Discussion Paper Series 539, Global Labor Organization (GLO).
    5. Gassmann, Franziska & Martorano, Bruno, 2019. "The future of work and its implications for social protection and the welfare state," MERIT Working Papers 2019-039, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

    More about this item

    Keywords

    artificial intelligence; technological unemployment; inequality; productivity growth;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O00 - Economic Development, Innovation, Technological Change, and Growth - - General - - - General
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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