Artificial intelligence and unemployment in high-tech developed countries: New insights from dynamic panel data model

Abstract

This study examines the effect of artificial intelligence on unemployment in high-tech developed countries. While artificial intelligence is more discussed in futuristic aspects, comprehensive empirical studies are limited in the literature. Therefore, this study uses the dataset, which includes 24 high-tech developed countries from 2005 to 2021 and examines the relationship between a country's Google Trend Index related to AI and the unemployment rate. In the empirical approach, we control the dynamic effect of unemployment by using dynamic panel data and GMM-system estimation to determine the effect of AI on unemployment. The main results show that artificial intelligence decreases the level of unemployment, and the ‘displacement effect’ of AI is validated.

Keywords

• F22
• C23
• O17