Artificial intelligence has put pressure on hiring in some highly exposed industries globally, but its overall labor-market impact remains narrow

Overview

This report assesses whether AI is creating hiring headwinds in labor markets outside the United States. It finds that AI adoption is already widespread across developed markets and that job openings and employment in industries with high AI exposure show signs of weakening; however, compared with the United States, the effects in most economies are more moderate, and overall labor markets have not experienced broad-based deterioration.

Core views

AI's impact on labor demand can already be observed in cross-country official and non-official data, but is mainly concentrated in industries and roles that can be more readily replaced by automation tools. Occupational-level estimates for France, Canada, and the United States show that higher AI exposure creates only a small average drag on annual employment growth. Entry-level roles are more sensitive, implying that AI diffusion may first alter the hiring structure for young and junior workers rather than immediately lead to widespread layoffs.

Analysis framework

The report aggregates 11 cross-economy AI adoption surveys and uses a Bradley-Terry model to derive comparable adoption-rate rankings from surveys with inconsistent definitions and samples, then calibrates the scale using the OECD business AI adoption survey. It subsequently combines Indeed.com industry job openings, official cross-country industry employment data, and Revelio Labs panel data covering more than 800 occupations to test the relationship between AI exposure and hiring and employment growth, controlling for country and industry fixed effects.

Methodology notes

• Adoption Rate ComparisonBradley-Terry Model

  Constructing overall rankings from unbalanced pairwise comparisons

  Used to integrate 11 cross-country surveys with differing adoption definitions and sample coverage, generating ordinal rankings of AI adoption across economies and calibrating them against the OECD survey.

• Labor Demand AnalysisIndustry Job Openings Regression

  Cross-industry relationship between AI exposure and changes in job openings

  Based on Indeed.com industry job openings in major developed markets, it examines whether industries with higher AI automation exposure have experienced weaker hiring demand since the second half of 2022.

• Employment Impact AssessmentCross-Country Occupational Panel Regression

  Regression estimates of occupational employment growth against AI exposure

  Using data from more than 800 occupations from Revelio Labs, it estimates the relationship between occupational AI exposure and annual employment growth after controlling for country and industry fixed effects, further distinguishing entry-level roles and occupations with high substitution risk.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Global Macro and Labor Markets

  AI diffusion changes the industry and occupational distribution of hiring demand and employment growth.

  Strengths

  The overall employment impact remains limited for now, indicating that macro labor markets are still resilient.

  Weaknesses

  Job openings and employment in highly exposed industries are weakening relative to trend, with more pronounced pressure on entry-level roles.

  Comparison

  Negative effects are most compelling in the United States; Germany and Australia also show notable negative correlations in job openings, while effects in most other economies are more moderate.

  Risks

  Faster AI adoption and corporate adjustments to hiring plans could spread pressure from localized industries to broader occupations and regions.

• Highly AI-Exposed Service Industries

  Call centers, software publishing, management consulting, advertising, and information and communications services are key areas where employment headwinds are currently observable.

  Strengths

  AI tools can raise productivity and reshape service-delivery models.

  Weaknesses

  Their high potential for labor automation makes hiring demand and employment performance more likely to lag long-term trends.

  Comparison

  Call center employment deviations from trend are especially pronounced; information and communications services show the largest below-trend gap in the United States, though other developed markets are also slowing.

  Risks

  Job substitution, reductions in entry-level positions, and skill mismatches could intensify.

Key data

• AI Adoption Rate in Leading EconomiesAbout 20%France and the United States lead; adoption rates are based on Bradley-Terry rankings across 11 surveys and calibrated against the OECD survey.
• AI Adoption Rate in Other Developed Markets15% to 20%The Netherlands and the United Kingdom are at the high end of the range, while Italy, Japan, and New Zealand are at the low end.
• AI Adoption Rate in Major Emerging Markets10% to 15%Slightly below that of major developed markets overall.
• Employment Impact of Occupational AI ExposureFor every 10% increase, annual employment growth declines by about 0.1 percentage pointThis estimate is mainly observed in France, Canada, and the United States; effects elsewhere are smaller or slightly positive.
• U.S. Call Center Employment Deviation from Trend39% below trendCanada is 33% below trend and Germany is 27% below trend.

Impact & implications

At the macro level, AI is currently more likely to reallocate hiring across industries and occupations than to broadly suppress employment growth. Investment and policy monitoring should focus on hiring in highly exposed service industries, demand for entry-level roles, and occupational substitution risk; labor-market headwinds could intensify if AI adoption continues to rise or its effects spread from highly exposed industries to broader services.

Risks

• Definitions and samples differ across cross-country AI adoption surveys. Although the study improves comparability through ranking and calibration methods, estimates remain subject to measurement error.
• The correlation between weaker job openings and employment and AI exposure does not necessarily establish strict causality; industry cycles, interest rates, and corporate cost controls may also have effects.
• Current impacts are primarily based on an early stage of AI diffusion; rising future adoption rates or technological capability advances could broaden the scope of impacts.
• If demand for entry-level roles continues to weaken, it could create long-term risks for talent development, income distribution, and youth employment.

What to watch

• Whether business AI adoption rates in major economies continue to rise and spread to more industries.
• The extent to which job openings, hiring plans, and employment in highly exposed industries deviate from long-term trends.
• Whether employment growth in entry-level roles and occupations with high substitution risk weakens further relative to non-entry-level roles.
• Whether developed markets outside the United States experience broad negative employment effects similar to those in the United States.
• Whether AI productivity gains can offset automation-driven hiring contraction through new jobs and business expansion.