The Political Economy of Artificial Intelligence: Evidence from Western Europe

While advances in artificial intelligence (AI) are feared to bring about widespread job losses, workers highly exposed to the technology tend to anticipate productivity-driven improvements in their earnings and employment prospects. I argue that this paradox has important political economy implications: if labor complementarities are expected to outweigh substitution effects—raising income without commensurately intensifying employment risks—exposure to AI should weaken rather than strengthen support for redistributive policies and their political advocates. I test this argument using a combination of observational and original experimental data from Western Europe, finding that occupation-level AI exposure is negatively associated with support for redistribution, the left, and the (increasingly pro-welfare) populist right but positively associated with support for the mainstream right. The results enhance our understanding of the political economy of digitalization, suggesting a discrepancy between the perceived distributional consequences of AI and earlier automation technologies that have primarily displaced labor.