Artificial intelligence (AI) could “displace” around 7% of existing jobs in the short to medium term, according to a new study, reports The Mirror.
A joint report from the Economic and Social Research Institute (ESRI) and the Department of Finance found that AI adoption is also likely to drive moderate increases in income inequality over the same period, reports The Mirror.
The study suggests that job losses will mainly affect workers in roles that can be partially performed by AI, while those who remain employed may benefit from higher wages linked to productivity gains from the technology.
Using ESRI models and international evidence, the research simulated a range of possible outcomes.
In its central scenario, the report estimates that AI adoption among Irish firms could lead to the displacement of about 7% of current jobs in the short to medium term, reports The Mirror.
It also warns that the resulting employment shock would be concentrated among highly educated workers, reflecting the high exposure of skilled occupations to AI technologies.
The report states: “Those most likely to experience this disruption are found in higher income households, where the share of workers transitioning into unemployment is substantially larger than in lower income families,” reports The Mirror.
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It adds: “Returns to capital are also expected to increase, modestly on average, but with disproportionate benefits accruing to the highest-income households who hold most capital assets. Taken together, these forces produce an overall decline in average household disposable income in the short term,” reports The Mirror.
The analysis is based on Ireland’s current occupational structure and does not account for the creation of new jobs or opportunities that AI could generate.
The ESRI noted that Ireland’s tax and welfare system is relatively well positioned to offset much of the income loss for lower-income households in the short term through welfare supports and reduced tax burdens, reports The Mirror.
It also said it could absorb around half of the losses for higher-income households.
However, the study found that all scenarios point to a small to moderate rise in income inequality, widening the gap between rich and poor, reports The Mirror.
The authors also warned that job displacement could have significant implications for the Ireland Exchequer.
The ESRI stated: “If employment losses are small or reallocation of workers is fast, Exchequer revenue may increase due to productivity gains,
“If job displacement is large, however, income tax receipts will fall relative to the baseline and welfare spending will rise, putting significant pressure on the public finances,” reports The Mirror.
The research highlights the importance of investment in retraining and supporting workers through the AI transition.
Report author Sorcha O’Connor said: “The widespread adoption of AI will likely boost productivity and raise living standards in the long term. However, it’s important that these benefits are widely dispersed and that everyone benefits,” reports The Mirror.
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