Author: Vimla Choudhary
Abstract: Artificial Intelligence (AI) is transforming labour markets by changing the nature of work, the composition of occupations, productivity and the demand for skills. This chapter examines the economic relationship between AI adoption and employment, with particular attention to automation, job displacement, job creation, wages, productivity and labour demand. AI can automate specific routine and information-processing tasks, while simultaneously augmenting human capabilities and creating new activities and occupations. Recent ILO research indicates that around one in four workers globally are in occupations with some degree of generative-AI exposure, while transformation of jobs is generally more prevalent than complete replacement. The chapter also examines the importance of reskilling and upskilling as AI changes occupational requirements. OECD research highlights growing demand for both specialised AI capabilities and skills needed to effectively use AI applications. Particular attention is given to the Indian context, including opportunities for productivity improvement, digital entrepreneurship and emerging employment, alongside challenges associated with skill gaps and unequal access to technology. The chapter concludes by discussing the importance of education, lifelong learning, labour-market institutions and appropriate policy responses in facilitating an inclusive transition toward an AI-enabled economy.
