The Macroeconomic Implications of Automation and AI on Labor Markets and Employment

Abstract

Artificial intelligence (AI) and automation are developing at an astounding rate, changing labor markets with significant macroeconomic ramifications. This study investigates the macroeconomic effects of automation and artificial intelligence (AI) on labor markets and employment, with a particular emphasis on pay inequalities, employment patterns across industries, job displacement, and shifts in skill demand. AI and automation are changing labor markets, creating new possibilities in tech-driven, high-skilled positions like digital security, data analysis, and AI engineering, but also displacing regular, manual work. Through econometric modeling and industry-specific analysis, this study finds strong relationships between automation levels and changes in employment measures, demonstrating how the advantages of automation are not uniformly dispersed and frequently exacerbate already-existing economic disparities. In order to address these tendencies, the analysis recommends legislative actions that promote fair access to education and training, allowing employees to adjust to the rapidly changing technological environment and guaranteeing that the financial benefits of automation are distributed widely throughout the workforce. These revelations offer a thorough grasp of how automation will influence job markets in the future.