Artificial intelligence, services globalisation and income inequality

Giulio Cornelli, Jon Frost and Saurabh Mishra

No 1135, BIS Working Papers from Bank for International Settlements

Abstract: How does economic activity related to artificial intelligence (AI) impact the income of various groups in an economy? This study, using a panel of 86 countries over 2010–19, finds that investment in AI is associated with higher income inequality. In particular, AI investment is tied to higher real incomes and income shares for households in the top decile, while households in the fifth and bottom decile see a decline in their income shares. We also find a positive association with exports of modern services linked to AI. In labour markets, there is a contraction in overall employment, a shift from mid-skill to high-skill managerial roles and a reduced labour share of income.

Keywords: artificial intelligence; automation; services; structural shifts; inequality (search for similar items in EconPapers)
JEL-codes: D31 D63 O32 (search for similar items in EconPapers)
Date: 2023-10
New Economics Papers: this item is included in nep-ain, nep-cmp and nep-tid
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