Artificial intelligence, growth and employment: the role of policy.

Summary In this paper, we argue that the effects of artificial intelligence (AI) and automation on growth and employment depend largely on institutions and policies. Our analysis is articulated in two parts. In the first part, we show that AI can stimulate growth by replacing labor with capital, both in the production of goods and services and in the production of ideas. However, we argue that AI can inhibit growth if combined with inappropriate competitive policy. In a second part, we discuss the effect of robotization on employment in France over the period 1994-2014. Based on our empirical analysis on French data, we show first that robotization reduces aggregate employment at the employment area level, and second that workers with low levels of education are more penalized by robotization than workers with high levels of education. This finding suggests that inappropriate labor market and education policies reduce the positive impact that AI and automation could have on employment.