Artificial Intelligence and Labor Market Transformations: Exploring the Role of Artificial Intelligence in Shaping Unemployment Rates in OECD Countries: Using a Dynamic Panel Data Model.

Abstract

This study investigates the relationship between artificial intelligence (AI) and unemployment in 11 OECD countries from 2004 to 2022. Using the two-step GMM system estimator to ensure reliable results, this research explores how AI impacts labor markets in highly innovative economies. By integrating alternative data sources such as Google Trends, the findings reveal a negative relationship between AI and unemployment, supporting the "displacement effect" where AI drives productivity and job creation in the long term. The results underscore the importance of adopting AI technologies and implementing proactive policies to mitigate short-term disruptions and harness AI's potential for economic growth and job creation. Therefore, the effective implementation of AI technologies in economic processes can reduce unemployment rates and increase wages by creating new job opportunities.