Abstract:
In cyber space era, the potential of AI has charismatic power to transform various sectors of society by improving
efficiency, accuracy, and safety. This research study aims to investigate the association between increasing
application of AI and its effect on employment status. Data on employment status, wage rates, and AI
application in percentage term are extracted from secondary sources such as the OECD. The findings reveal that
Germany and the United Kingdom have the highest number of people employed in reference period, indicating a
robust workforce. Estonia, on the other hand, has room for growth in terms of employment opportunities. It is
noted that Luxembourg and the Netherlands offer the highest minimum annual wages in Europe. The study also
highlights the variation in AI utilization by firms, with Luxembourg and the Netherlands leading the way, while
Greece and Romania have lower adoption rates. Regression analysis shows that both AI utilization and annual
wage rates significantly affect employment status. Higher AI utilization is associated with lower employment
levels, suggesting potential job replacement through automation. Conversely, higher wages are linked to
increased employment status, indicating that attractive wages can attract and retain more workers. Interestingly,
the study suggests that AI utilization has a larger impact on employment status than wage rates. However, it is
crucial to note that these findings represent regression analysis of selected variables for reference period and
should not be interpreted as causation. To fully capitalize on the benefits of AI, collaboration between
policymakers, businesses, and communities is essential to equip the workforce with the necessary skills to adapt
and thrive in an AI-driven economy. This approach will maximize the potential benefits of AI while mitigating
any negative impacts on employment.
