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AI is transforming labor markets around the world. Existing research has focused on advanced economies but has neglected developing economies. Different impacts of AI on labor markets in different countries arise not only from heterogeneous occupational structures, but also from the fact that occupations vary across countries in their composition of tasks. We propose a new methodology to translate existing measures of AI impacts that were developed for the US to countries at various levels of economic development. Our method assesses semantic similarities between textual descriptions of work activities in the US and workers' skills elicited in surveys for other countries. We implement the approach using the measure of suitability of work activities for machine learning provided by Brynjolfsson et al. (Am Econ Assoc Pap Proc 108:43-47, 2018) for the US and the World Bank's STEP survey for Lao PDR and Viet Nam. Our approach allows characterizing the extent to which workers and occupations in a given country are subject to destructive digitalization, which puts workers at risk of being displaced, in contrast to transformative digitalization, which tends to benefit workers. We find that workers in urban Viet Nam, in comparison to Lao PDR, are more concentrated in occupations affected by AI, which requires them to adapt or puts them at risk of being partially displaced. Our method based on semantic textual similarities using SBERT is advantageous compared to approaches transferring AI impact scores across countries using crosswalks of occupational codes. [ABSTRACT FROM AUTHOR]

To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.jedc.2010.06.016 Byline: Ekkehard Ernst (a), Willi Semmler (b) Abstract: In this paper global macroeconomic dynamics are studied when search frictions are present in both labor and capital markets. On the basis of the macroeconomic model with labor market frictions and capital accumulation, our paper offers an extension to frictions in capital markets, analogously modeled as a search and matching process. Using the Merz model as limit case, we consider exogenous as well as endogenous borrowing constraints. We also allow the cost of issuing bonds to change endogenously. As we show, capital market frictions exacerbate and accentuate the interaction between the two markets and magnify the effects of shocks on output, consumption, employment, and welfare. This interaction of the frictions in labor and capital markets are also shown to give rise to multiple equilibria. On the basis of numerical solution techniques, instead of relying on first or second order approximations around a (unique) steady state, our paper uses dynamic programming techniques to compute decision variables and the value function directly and assess the local and global dynamics of the model. The steady state solutions are studied by using the Hamiltonian and the dynamics are assessed for various model variants by using dynamic programming techniques. Author Affiliation: (a) ILO, International Institute for Labour Studies, Geneva, CH, Switzerland (b) New School for Social Research, Department of Economics, New York, USA Article Note: (footnote) [star] The authors would like to thank participants at the Conference on Computing in Economics and Finance, Paris, 2008, and the 2007 Conference of the Society for Non-linear Dynamics and Econometrics for helpful comments. Many thanks also to Uwe Koller who provided very valuable and timely research assistance as well as to three anonymous referees whose comments helped substantially in improving upon the original version of the paper. An empirical version of this paper was presented at the North American Winter Meeting of the Econometric Society, Atlanta, January 3-5, 2010.

In this paper we present comparative evidence from OECD countries concerning the impact of labour market institutions and regulations on technological specialization. The interplay between the degree of labour market flexibility, the system of industrial relations and the knowledge base of different industries determines the viability of different human resource strategies, thereby shaping the patterns of comparative advantage. Our empirical results show that countries with coordinated industrial-relations systems and strict employment protection tend to specialize in industries with a cumulative knowledge base. We argue that two mechanisms explain these patterns. The larger the scope for resorting to internal labour markets, the lower the adjustment costs imposed by labour market regulation. Furthermore, employment protection and coordinated industrialrelations regimes, by aligning workers' and firms' objectives, encourage firmsponsored training as well as the accumulation of firm-specific competencies, allowing firms to fully exploit the potential of the internal labour market. [ABSTRACT FROM AUTHOR]

Earlier research on the links between economic growth and credit market development has abstracted from interactions between labour and financial markets. Moreover, most studies have analysed macro-finance linkages at the aggregate level, ignoring the decentralized nature of search and matching in labour and credit markets. This paper fills this void and thus allows for a more disaggregate analysis of policy effects. We show that the credit market exacerbates and accentuates the labour market effects, having amplifying effects on output, consumption, employment and welfare. Depending on the strength of the debt-dynamics, several growth dynamics emerge from this interaction between labour and credit markets with two distinct steady states: a stable growth regime and another one that is vulnerable and unstable. To test the empirical implications of the theoretical model, a multi-regime VAR (MRVAR) model is fitted to the US output and credit market data. The MRVAR estimation indicates that shocks to credit conditions during a high-growth period have markedly different effects than during a low growth and recessionary period. Also, there are substantial state-dependent asymmetries with respect to the sign of shocks to credit conditions, confirming the theoretical predictions. [ABSTRACT FROM AUTHOR]

This article reviews the current state of research on unemployment dynamics in macroeconomic models. In particular, it discusses the increasingly widespread use of the labour-market flow approach as implemented via a search and matching process and presents main policy considerations that arise from this approach related to unemployment benefit systems and employment protection. It reviews the implications of the labour-flow approach for dynamic properties of macroeconomic models and discusses policy implications for macroeconomic and labour-market policies. Finally, it presents new evidence on the effectiveness of policies to influence unemployment in- and outflows. [ABSTRACT FROM AUTHOR]