Research from the European Central Bank indicates that artificial intelligence (AI) has the potential to reduce wages, not jobs.
It states that the swift integration of artificial intelligence is generating jobs, particularly for the young and highly skilled and its adoption could impact wages, but would not be a concern for job security, according to research by the European Central Bank (ECB).
Despite concerns about the future impact on employment, companies heavily investing in AI are experiencing a shortage of qualified workers, contrary to the typical labour market trends during a recession.
The research shows that across 16 European countries, the employment share in AI-exposed sectors has risen, with low and medium-skill jobs largely unaffected, while highly skilled positions see the most significant increase, as reported in the ECB’s Research Bulletin.
This may also be true for Africa, particularly Nigeria.
What the report states
Here is an excerpt of the report seen by Nairametrics:
- “Using data for occupations at the 3-digit level in Europe, we find that on average employment shares have increased in occupations more exposed to AI. This is particularly the case for occupations with a relatively higher proportion of younger and skilled workers.
- “This evidence is in line with the Skill Biased Technological Change theory. While there exists heterogeneity across countries, only very few countries show a decline in employment shares of occupations more exposed to AI-enabled automation.
- “Country heterogeneity for this result seems to be linked to the pace of technology diffusion and education, but also to the level of product market regulation (competition) and employment protection laws. In contrast to the findings for employment, we find little evidence for a relationship between wages and potential exposures to new technologies”.
However, the study also notes “neutral to slightly negative impacts” on earnings, which may escalate over time.
- “These results do not amount to an acquittal as AI-enabled technologies continue to be developed and adopted. Most of their impact on employment and wages and therefore on growth and equality is yet to be seen.”