The Impact of Wages, Unemployment and Economic Growth on Artificial Intelligence: Evidence from Countries Divided into Three Groups in the Government Artificial Intelligence Readiness Index

Abstract

We investigate the impact of wages, unemployment and economic growth on the advancement of artificial intelligence (AI) in developed and developing countries, using a theoretical model validated empirically. Investigating the relationship between these indicators on a panel of 90 countries divided into 3 groups, we find that the policy of the state on the development of AI depends on the wages, unemployment and economic growth of the country. We use the AI Government Readiness Index as a proxy of AI and find a positive correlation with wages for all 90 countries. Investigating the impact of unemployment rates and real GDP, divided into three groups according to their place in the Government AI Readiness Index, we observe heterogeneous dependencies between these indicators. For example, the relationship between AI and unemployment has not been established in any group. And the relationship between real GDP and AI in developing countries actively implementing AI was positive and strong, but such a relationship was not found in other groups of countries.