A potential boost from AI in ageing societies

Demographic headwinds are set to weaken economic growth in OECD countries over the coming decades. At the same time, artificial intelligence (AI) provides opportunities for productivity gains, potentially alleviating labour shortages and boosting economic growth. However, little is known about how exposure to AI varies over the life cycle and what this may imply for AI deployment in ageing societies. This paper shows, using OECD Programme for the International Assessment of Adult Competencies (PIAAC) data, that workers’ overall exposure to AI (automation and augmentation) exhibits an inverted U-shaped pattern across age groups, albeit less pronounced when controlling for education, occupation and country. Exposure to automation is higher in younger age groups and declines rapidly with age, as experience tends to complement AI. Nevertheless, as a general-purpose technology, AI is bound to be disruptive. Reaping its benefits will require labour market reallocation, reskilling and upskilling, and business dynamism and innovation, which may all be weaker in ageing societies.