As the proliferation of AI technologies has increased, so has the widespread fear of an obsolete workforce whose jobs have been automated. This paper investigates the impact of AI on the unemployment rate across 55 countries, including an in-depth analysis of the heterogeneous impacts on developed and developing countries. Our study includes 55 countries divided into 28 developed and 27 developing from 2010-2020. We conduct a panel data analysis using two-way fixed effect models to assess the relationship between the two variables and their significance. The main results show that AI has a positive significant relationship with the unemployment rate, which validates the doomsayer's view of negative disruptions to the labour market. Further analysis shows that the countries that will suffer the brunt of AI proliferation are the developed countries whose analysis, unlike the developing countries, showed a positive significant relationship between AI and the unemployment rate. After multiple robustness checks, we find that the results still hold to an extent and that the effects of AI will mainly be felt in the developed world. The paper calls for policymakers to distribute the gains from AI equitably and create a framework for possible digital capital taxation to protect workers from the fallout of the impact of AI.
| Identifer | oai:union.ndltd.org:UPSALLA1/oai:DiVA.org:hj-64879 |
| Date | January 2024 |
| Creators | Mohamed, Hussein, Mohamed, Musab |
| Source Sets | DiVA Archive at Upsalla University |
| Language | English |
| Detected Language | English |
| Type | Student thesis, info:eu-repo/semantics/bachelorThesis, text |
| Format | application/pdf |
| Rights | info:eu-repo/semantics/openAccess |
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