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Mind the Gap: AI Adoption in Europe and the US

Author

Listed:
  • Alexander Bick
  • Adam Blandin
  • David J. Deming
  • Nicola Fuchs-Schündeln
  • Jonas Jessen
  • David Deming

Abstract

This paper combines international evidence from worker and firm surveys conducted in 2025 and 2026 to document large gaps in AI adoption, both between the US and Europe and across European countries. Cross-country differences in worker demographics and firm composition account for an important share of these gaps. AI adoption, within and across countries, is also closely linked to firm personnel management practices and whether firms actively encourage AI use by workers. Micro-level evidence suggests that AI generates meaningful time savings for many workers. At the macro level, in recent years industries with higher AI adoption rates have experienced faster productivity growth. While we do not establish causality, this relationship is statistically significant and similar in magnitude in Europe and the US. We do not find clear evidence that industry-level AI adoption is associated with employment changes. We discuss limitations of existing data and outline priorities for future data collection to better assess the productivity and labor market effects of AI.

Suggested Citation

  • Alexander Bick & Adam Blandin & David J. Deming & Nicola Fuchs-Schündeln & Jonas Jessen & David Deming, 2026. "Mind the Gap: AI Adoption in Europe and the US," CESifo Working Paper Series 12584, CESifo.
    • Handle: RePEc:ces:ceswps:_12584
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    File URL: https://www.ifo.de/DocDL/cesifo1_wp12584.pdf
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    Keywords

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    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • M16 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - International Business Administration
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • 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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