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31. Generative Artificial Intelligence and Its Implications for Labor Markets in Developing Countries: A Review Essay

Author:
Guillermo Cruces, Verónica Amarante, and Estefanía Lotitto
Publication Date:
12-2024
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
The unprecedented developments in artificial intelligence technology and its recent widespread availability hold transformative potential to reshape global economic dynamics and labor markets, though opinions on its effects vary greatly. Transformative or not, the irruption of AI has sparked ample public discussion as well as the rapid development of theoretical and empirical approaches to understand it. This review essay discusses recent perspectives, theories, and empirical evidence on the matter, and adds a perspective of the implications of this technology and of the policy discussion it has sparked, from the perspective of developing countries’ economies. The latter is motivated by the relative scarcity of such perspectives in the current public debate, which seems to have minimized the potential effects on the interaction of labor markets between developing and developed countries, and on the potentially different within-country effects at different levels of development.
Topic:
Economic Development, Artificial Intelligence, Literature Review, Labor Market, and Work
Political Geography:
Global Focus

32. Effects of Hiring Credits on the Argentine Labor Market

Author:
Octavio Bertín, Guillermo Cruces, Diego Chaves-González, Ignacio Lunghi, and Azul Menduiña
Publication Date:
12-2024
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
This study assesses the impact of a hiring credit policy introduced in Argentina in 2014 on various labor outcomes of firms. The reform established differentiated labor cost reductions in the employers contributions to be paid for their new employees, according to the size that firms had at a date prior to the announcement of the policy. Using a differences-in-differences approach and employer-employee administrative data, we analyze the intervention’s effects. Our results show a significant 4.1 percentage point increase in employment growth rates for small firms compared to medium-sized ones, persisting for several years post-reform. This paper also explores the relationship between the intervention’s effects and sector labor informality; we find a significant 6.2 percentage point increase in employment growth rates for firms in high-informality sector, whereas no significant effect is found for firms in lowinformality sectors.
Topic:
Employment, Labor Market, Wages, and Hiring Credits
Political Geography:
Argentina and South America

33. Youth Employment in Tourism: A Multidimensional Approach of Job Quality in Latin America

Author:
Malena Dolcet, Natalia Porto, and Joaqu´ın Zarrilli
Publication Date:
08-2024
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
Young people entering the labor markets face several and important challenges. These issues deepen due to rooted structural barriers such as informality or precarity, low-paid jobs, and low economic growth in regions like Latin America and sectors such as tourism (Abramo, 2022). Tourism has great potential to employ many of these young people because it provides opportunities for skilled and unskilled workers, it has low barriers to entry and flexible conditions, and it provides critical skills for their professional life. However, the youth population needs to reduce the gap between their available skills and experienced gained and the future requirements of labor markets to avoid being socially excluded. We apply the multidimensional poverty methodology developed by Alkire and Foster (2011) to build a Quality of Employment index (QoE) for young workers employed in the tourism industry in Latin America for the period 2015-2019. Focusing on two groups of young workers -super young for those aged 15 to 24 and young those aged 25 to 35- we consider several aspects of working conditions and discuss some differences in job quality across countries by gender and education considering different levels of deprivation in the index. The results suggest a high level of deprivation in the young workers, specially in the super young group. However, employment quality increased in both groups for all countries in the region during the period 2015-2019.
Topic:
Tourism, Employment, Youth, and Labor Market
Political Geography:
Latin America

34. Buffer or Bottleneck? Employment Exposure to Generative AI and the Digital Divide in Latin America

Author:
Paweł Gmyrek, Hernan Winkler, and Santiago Garganta
Publication Date:
11-2024
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
Empirical evidence on the potential impacts of generative artificial intelligence (GenAI) is mostly focused on high-income countries. In contrast, little is known about the role of this technology on the future economic pathways of developing economies. This paper contributes to fill this gap by estimating the exposure of the Latin American labor market to GenAI. It provides detailed statistics of GenAI exposure between and within countries by leveraging a rich set of harmonized household and labor force surveys. To account for the slower pace of technology adoption in developing economies, it adjusts the measures of exposure to GenAI by using the likelihood of accessing digital technologies at work. This is then used to assess the extent to which the digital divide across and within countries will be a barrier to maximize the productivity gains among occupations that could otherwise be augmented by GenAI tools. The findings show that certain characteristics are consistently correlated with higher exposure. Specifically, urban-based jobs that require higher education, are situated in the formal sector, and are held by individuals with higher incomes are more likely to come into interaction with this technology. Moreover, there is a pronounced tilt toward younger workers facing greater exposure, including the risk of job automation, particularly in the finance, insurance, and public administration sectors. When adjusting for access to digital technologies, the findings show that the digital divide is a major barrier to realizing the positive effects of GenAI on jobs in the region. In particular, nearly half of the positions that could potentially benefit from augmentation are hampered by lack of use of digital technologies. This negative effect of the digital divide is more pronounced in poorer countries.
Topic:
Employment, Digital Economy, Artificial Intelligence, and Labor Market
Political Geography:
Latin America

35. Gender Inequality in Latin America

Author:
Inés Berniell, Leonel Fernández, and Sonya Krutikova
Publication Date:
07-2024
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
This paper examines gender inequality focusing on two critical spheres in which gender inequality is generated: education and work. Our objective is to provide a snapshot of gender inequality across key indicators as well as a dynamic perspective that highlights successes and failures. We also facilitate a cross-country comparison by grouping countries within Latin America by their level of economic development and drawing comparisons with countries outside the region. Finally, we reflect on differences in the ways that gender inequalities play out across different socio-economic groups, particularly those that highlight other sources of inequality
Topic:
Education, Inequality, Labor Market, Gender Wage Gap, and Gender Equality
Political Geography:
Latin America

36. Measuring Green Jobs: A New Database for Latin America and Other Regions

Author:
Hernan Winkler, Vincenzo Di Maro, Kelly Montoya, Sergio Olivieri, and Emmanuel Vazquez
Publication Date:
09-2024
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
A growing body of literature investigates the labor market implications of scaling up “green” policies. Since most of this literature is focused on developed economies, little is known about the labor market consequences for developing countries. This paper contributes to filling this gap by providing new stylized facts on the prevalence of green occupations and sectors across countries at varying levels of economic development. Green occupations are defined using the Occupational Information Network, and green sectors are those with relatively lower greenhouse gas emissions per worker. The paper offers an initial assessment of how the implementation of green policies—aimed at expanding green sectors and strengthening the relative demand for green skills—may affect workers in developing economies. It finds that the share of green jobs is strongly correlated with the level of gross domestic product per capita across countries. When controlling for unobserved heterogeneity, a 1 percent increase in gross domestic product per capita is associated with 0.4 and 4.1 percentage point increases in the shares of new and emerging, and enhanced skills green jobs, respectively. The paper then focuses on Latin America and finds that only 9 percent of workers have a green job with respect to both occupation and sector. The findings show that within countries, workers with low levels of income and education are more likely to be employed in non-green sectors and occupations, and to lack the skills for a greener economy. This evidence suggests that complementary policies are needed to mitigate the potential role of green policiesin widening income inequality between and within countries.
Topic:
Climate Change, Employment, Labor Market, and Green Jobs
Political Geography:
Latin America

37. The state of the UK economy 2024

Author:
UK in a Changing Europe
Publication Date:
01-2024
Content Type:
Special Report
Institution:
UK in a Changing Europe, King's College London
Abstract:
The state of the UK economy is always an important matter, but it is all the more so in what looks likely to be an election year. This UK in a Changing Europe report takes stock of the UK economy in order to assess how it can break from the current economic and political ‘doom loop’. The report provides a constructive framework to address the need for a longer-term, joined up approach in policy areas, ranging from education to immigration, to public services and artificial intelligence. It shows that there is no single silver bullet for the problems facing the UK economy, however a number of themes have emerged. The UK has long been plagued by short-termism and political instability which needs to be addressed. Edited by Senior Fellow Professor Jonathan Portes, it brings together leading UK academics on the economy from universities across the UK, the Migration Observatory, the Institute for Fiscal Studies and other research institutions.
Topic:
Education, Industrial Policy, Migration, Economy, Tax Systems, Macroeconomics, Trade, Artificial Intelligence, Housing, Labor Market, Public Service, Productivity, and Net Zero
Political Geography:
United Kingdom and Europe

38. Refugees from Ukraine Adapting to the European Labour Market

Author:
Jolanta Szymańska
Publication Date:
03-2023
Content Type:
Working Paper
Institution:
The Polish Institute of International Affairs
Abstract:
Due to the length of the war in Ukraine, more and more refugees from this country have decided to take up employment in the EU. Preliminary data indicate that they are integrating into European labour markets faster than refugees from other regions. However, the mismatch between their jobs and qualifications remains a challenge. Despite the refugees’ inclusion, the deteriorating economic situation in Europe may lead to negative perceptions in host countries.
Topic:
Economics, European Union, Refugees, and Labor Market
Political Geography:
Russia, Europe, and Ukraine

39. Employer perspectives on employee work location: collaboration, culture and control

Author:
Diane Mulcahy and Tatiana Andreeva
Publication Date:
05-2023
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
This paper discusses employers’ experience of working fully remotely during the pandemic, and their approaches to returning to the office following the pandemic. We chose to focus on the point of view of the employer since it is relatively less explored; much more is available and written on the views and opinions of employees about remote work and return to office. To understand the employer’s perspective, we reviewed existing research evidence, and carried out eleven structured interviews with corporate leaders about their experiences with remote, in-office and hybrid work. Our literature review suggests that remote work does not have negative effects on performance. Similarly, the small sample of employers we interviewed experienced very strong company and employee performance while operating their businesses fully remotely. All employers we interviewed are implementing a hybrid return-to-office policy, although the specifics of the policies are different for each company. No employer was returning to full in-office work. We focused our literature review and interviews on the impact of remote work on employee collaboration, firm culture and manager control, which we call ‘the 3 Cs’. We found that leaders maintain a belief that employee collaboration is negatively impacted by remote work, but the evidence to support this assumption is mixed. Firm culture is often cited by employers as an important rationale for bringing employees back to the office, but the research evidence and our interviewees suggest that the notion of culture is vague and the idea that better culture is supported by in-office work is not supported by any data. Finally, the shift to remote work caused corporate leaders and front-line managers to worry about effectively managing employees they couldn’t see every day. We found that companies did not widely begin implementing employee monitoring systems in lieu of onsite management. Our interviews suggest that much learning remains to transition managers and leaders to effectively managing remote or hybrid employees and teams.
Topic:
Science and Technology, Employment, Innovation, Labor Market, and Remote Work
Political Geography:
Global Focus

40. The Impact of Robots in Latin America: Evidence from Local Labor Markets

Author:
Irene Brambilla, Andrés César, Guillermo Falcone, and Leonardo Gasparini
Publication Date:
04-2023
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
We study the effect of robots on labor markets in Argentina, Brazil, and Mexico, the major robot users in Latin America, during the period 2004{2016. We exploit spatial and time variations in exposure to robots arising from initial differences in industry specialization across geographic locations and the evolution of robot adoption across industries, to estimate a causal effect of robots on local labor market outcomes. We find that district’s exposure to robots causes a relative deterioration in labor market indicators such us unemployment and labor informality. We document that robots mainly replace formal salaried jobs, affecting young and semi-skilled workers to a greater extent, and that informal employment acts as a buffer that prevents a larger increase in unemployment.
Topic:
Unemployment, Robotics, Labor Market, and Informal Economy
Political Geography:
Brazil, Argentina, Latin America, and Mexico