How is Labor Demand Changing as AI Improves? New Global Evidence

Sakai Ando, Divya Kirti, Willa Lin and Assyifa Szami Ilman

No 2026/220, IMF Working Papers from International Monetary Fund

Abstract: The rapid advance of generative artificial intelligence (AI) has sparked intense debate about its effects on labor markets. We draw on over 700 million online job postings to present new evidence covering 110 economies. Demand has declined by nearly 10 percent in more AI-exposed occupations but, surprisingly, this impact has stabilized even as AI has become more capable. To understand this pattern, we develop a novel measure of AI adoption based on references to emerging AI skills in job postings. Demand for these skills has grown rapidly, particularly in more exposed occupations. Indeed, firms with stronger demand for AI skills exhibit faster growth in job postings, even in more exposed occupations. AI appears to be reshaping labor demand by both compressing hiring in more exposed occupations and generating new opportunities for workers with AI skills.

Keywords: Generative artificial intelligence; Employment; Occupations; Emerging AI skills (search for similar items in EconPapers)
Pages: 53
Date: 2026-10-18
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