Estimating the True Impact of Artificial Intelligence on Labor Productivity in a Global Context

Abstract

With the impressive growth AI and ICT have seen in the latest years, our study aims to measure the impact this development has on labor productivity, a key component of economic prosperity. We study 185 countries for the period 2005-2022, using panel data regression models to examine varying levels of economic development determining the impact of AI, ICT, and other socioeconomic and cultural factors. We find that AI and ICT positively contribute to productivity, and that higher-income countries better utilize these technologies for productivity boosts. Inequalities in the power or economic structure of a country hinders its ability to efficiently benefit from AI and ICT advancements while damaging labor productivity overall. Individualistic societies with great levels of education get the most out of the technological advancements and have overall higher productivity levels. Overall, we find that a 1% increase in AI patents translates to a 0.0678% increase in GDP per worker.