ARTIFICIAL INTELLIGENCE AND SERVICE, INDUSTRIAL, AND AGRICULTURAL EMPLOYMENT: COMPREHENSIVE INTERNATIONAL MACROECONOMIC EVIDENCE

Abstract

Recent advancements in artificial intelligence (AI) technology have revived concerns about technological unemployment. Regarding the issue, this study examines the impact of AI on employment rates across 17 leading AI countries from 1998 to 2017 using two panel econometric techniques, DOLS and FMOLS, to ensure robust results. For the first time, as far as is known, the effect of AI on employment in distinct sectors is analyzed separately. By uniquely combining different countries and sectors within a macroeconomic framework, this study provides a more comprehensive understanding through a total of eight estimates. The findings indicate that, according to both DOLS and FMOLS techniques, increased AI innovation raises employment rates in the overall economy and in the service sector, while reducing employment rates in the industrial and agricultural sectors. Consequently, while AI positively impacts overall employment, considering industrial and agricultural sectors, employment policies should be adjusted to meet evolving needs in the AI era.