OECD Artificial Intelligence Papers

The OECD engages in comprehensive research and analysis to deepen insights into the transformative power of artificial intelligence (AI) and its implications for economies and societies. The OECD Artificial Intelligence Papers series draws on comprehensive evidence-base to identify trends and developments and delve into an extensive array of AI-related subjects. This includes opportunities and challenges in AI governance, the impact of AI across policy domains including labour markets, education and healthcare, ethical considerations in AI design and deployment, and new frontiers such as generative AI. This collection encompasses OECD policy papers as well as working papers.


Artificial intelligence and wage inequality

This paper looks at the links between AI and wage inequality across 19 OECD countries. It uses a measure of occupational exposure to AI derived from that developed by Felten, Raj and Seamans (2019) – a measure of the degree to which occupations rely on abilities in which AI has made the most progress.

The results provide no indication that AI has affected wage inequality between occupations so far (over the period 2014-2018). At the same time, there is some evidence that AI may be associated with lower wage inequality within occupations – consistent with emerging findings from the literature that AI reduces productivity differentials between workers.

Further research is needed to identify the exact mechanisms driving the negative relationship between AI and wage inequality within occupations. One possible explanation is that low performers have more to gain from using AI because AI systems are trained to embody the more accurate practices of high performers. It is also possible that AI reduces performance differences within an occupation through a selection effect, e.g. if low performers leave their job because they are unable to adapt to AI tools by shifting their activities to tasks that AI cannot automate.


Keywords: Skills, Artificial intelligence, Employment
JEL: O33: Economic Development, Innovation, Technological Change, and Growth / Innovation; Research and Development; Technological Change; Intellectual Property Rights / Technological Change: Choices and Consequences; Diffusion Processes; J24: Labor and Demographic Economics / Demand and Supply of Labor / Human Capital; Skills; Occupational Choice; Labor Productivity; J23: Labor and Demographic Economics / Demand and Supply of Labor / Labor Demand; J21: Labor and Demographic Economics / Demand and Supply of Labor / Labor Force and Employment, Size, and Structure
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