Eurozone: Why GenAI’s labor market transition will not be seamless | Oxford Economics Skip to content
Research briefing | September 23, 2024
We believe that generative artificial intelligence could add up to 1.2 million jobs to the euro area labor market by 2040. However, the impact will be highly uneven across roles and sectors, and government action and structural reforms will be key to mitigating downside risks.
What you will learn:
GenAI has the potential to disrupt particularly atypical cognitive tasks. However, increasing worker productivity, especially in sectors that have struggled to convert job growth into productivity, as well as creating new jobs and having secondary effects on consumer spending, will reduce job losses. We believe that this will offset the impact on employment caused by Workers in sectors boosted by GenAI should also benefit from higher labor market mobility, given the demand for transferable soft skills in highly recognized non-routine tasks. However, the scale of active labor market policies that are essential to prevent the structuring of temporary labor market frictions varies widely across the euro area. GenAI needs to be at the forefront of the EU’s industrial strategy and active labor market policies, as protection of private sector profit margins must be balanced with ethical considerations around turnover and sectoral shifts. . In particular, Europe’s regulatory framework, underdeveloped capital markets, and weak IT investment need to be addressed to ensure the effective implementation of GenAI in the labor market. Return to resource hub
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