AI and the distribution of income between capital and labour

Beschreibung

The swift rise of artificial intelligence is raising fundamental concerns about the future of work. This column uses data from 238 regions across 21 European countries to examine how AI-related innovation influences the distribution of income between labour and capital, and among different skill classes of labour. Regions with more intense AI patenting tend to experience a decline in the labour share of income, especially in areas with a strong industrial base, indicating that AI acts as a capital-biased innovation. Without appropriate policy intervention, this trend could exacerbate existing inequalities.