Nº 343 (Diciembre, 2024). Guillermo Cruces, Verónica Amarante y Estefanía Lotitto

The unprecedented development of generative artificial intelligence (GenAI) holds transformative potential for global labor markets, yet current research focuses predominantly on high-skilled workers in developed economies. This review synthesizes recent theoretical and empirical evidence on AI’s implications for labor markets, centering on a perspective largely absent from current debates: its potential effects on developing countries. We examine two critical questions: how AI affects the division of labor between countries, potentially reshaping offshoring patterns and creating new forms of digital labor exploitation, and how distributional effects within countries vary across skill levels and differ between developed and developing country contexts. Task-based models suggest high-skilled workers face greater exposure to AI. However, the implications for worker welfare remain ambiguous, as exposure alone does not determine whether workers will benefit from or be harmed by this new form of technological change in a new global general equilibrium. Experimental evidence finds mixed results on AI’s equalizing potential, with effects varying by task complexity and worker characteristics. For developing countries, three interconnected challenges fundamentally shape AI’s impact: high informality and inequality, preexisting skills deficits, and limited digital infrastructure. These barriers create a dual risk: late technology adoption that hampers productivity growth, and exploitative integration into global AI value chains through poorly regulated data work and digital platforms. We conclude by proposing a research agenda and policy priorities specifically addressing developing countries’ unique challenges and opportunities in navigating the AI transition.

Códigos JEL: J310, J010, J200, J230, J240, 0150

Cita sugerida: Cruces, G., V. Amarante y E. Lotitto (2024). Generative Artificial Intelligence and Its Implications for Labor Markets in Developing Countries: A Review Essay. Documentos de Trabajo del CEDLAS Nº 343, Diciembre, 2024 (Actualizado Enero 2026), CEDLAS-FCE-Universidad Nacional de La Plata.