On the Effects of Artificial Intelligence on Growth and Employment OpenMind

In this paper, we argue that the effects of artificial intelligence (AI) and automation on growth and employment depend to a large extent on institutions and policies. In the first part of the paper we survey the most recent literature to show that AI can spur growth by replacing labor by capital, both in the production of goods and services and in the production of ideas. However, AI may inhibit growth if combined with inappropriate competition policy. In the second part of the paper we discuss the effect of robotization on employment in France over the 1994–2014 period. Based on our empirical analysis on French data, we first show that robotization reduces aggregate employment at the employment zone level, and second that noneducated workers are more negatively affected by robotization than educated workers. This finding suggests that inappropriate labor market and education policies reduce the positive impact that AI and automation could have on employment. This paper borrows unrestrainedly from our article on AI and economic growth, published in Economics and Statistics (Aghion et al., 2019). Artificial Intelligence (AI) is typically defined as the capability of a machine to imitate intelligent human behavior. True, since 1820 our economies have seen several technological revolutions which resulted in the automation of tasks previously performed by labor.