Artificial Intelligence and Employment: A Look into the Crystal Ball

This study provides evidence of the employment impact of AI exposure in European regions, addressing one of the many gaps in the emerging literature on AI's effects on employment in Europe. Building upon the occupation-based AI-exposure indicators proposed by Felten et al. (2018, 2019, 2021), which are mapped to the European occupational classification (ISCO), following Albanesi et al. (2023), we analyse the regional employment dynamics between 2011 and 2018. After controlling for a wide range of supply and demand factors, our findings indicate that, on average, AI exposure has a positive impact on regional employment. Put differently, European regions characterised by a relatively larger share of AI-exposed occupations display, all else being equal and once potential endogeneity concerns are mitigated, a more favourable employment tendency over the period 2011-2018. We also find evidence of a moderating effect of robot density on the AI-employment nexus, which however lacks a causal underpinning.