International Journal For Multidisciplinary Research

E-ISSN: 2582-2160   •   Impact Factor: 9.24

A Widely Indexed Open Access Peer Reviewed Multidisciplinary Bi-monthly Scholarly International Journal

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Volume 7 Issue 6
November-December 2025

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Impact of Artificial Intelligence on Labor Markets: An Economic Perspective

Author(s) Ms. Gurpiya Kaur
Country India
Abstract This paper examines how Artificial Intelligence is reshaping economic structures, labour markets, and institutional dynamics across advanced and developing economies. Drawing on theoretical foundations such as creative destruction and skill-biased technological change, it evaluates how AI differs from past automation waves through its self-learning capabilities, rapid diffusion, and expansion into non-routine cognitive tasks. Empirical evidence shows that AI simultaneously displaces routine work, creates new technical and analytical occupations, and intensifies productivity concentration among “superstar firms.” The paper highlights the uneven wage effects of AI, demonstrating how institutional contexts influence whether productivity gains translate into broad-based income growth or rising inequality. Through comparative insights from Nordic countries, Singapore, and India, the analysis underscores that the distributional outcomes of AI depend less on the technology itself and more on policy choices related to education, regulation, and inclusion. The paper concludes that AI’s long-term economic impact will be determined by the capacity of societies to combine innovation with human capital investment, ensuring that efficiency and social equity advance together.
Keywords Artificial Intelligence, labour markets, automation, skill-biased technological change, wage inequality, productivity, human capital investment
Published In Volume 7, Issue 6, November-December 2025
Published On 2025-11-20
DOI https://doi.org/10.36948/ijfmr.2025.v07i06.61047
Short DOI https://doi.org/hbbz6m
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