The OECD Employment Outlook provides an annual assessment of key labour market developments and prospects in OECD member countries. Each edition also contains several chapters focusing on specific aspects of how labour markets function and the implications for policy in order to promote more and better jobs. The 2023 edition of the OECD Employment Outlook examines the recent evolution of labour demand and widespread shortages, as well as wage developments in times of high inflation and related policies. It also takes stock of the current evidence on the impact of artificial intelligence (AI) on the labour market and investigates how to get the balance right in addressing the possible negative effects of AI on labour market outcomes while not stifling its benefits.

The release of ChatGPT on 30 November 2022 was a revelation in the advance of artificial intelligence (AI). Developed with large language models, the easy-to‑use tool demonstrated a remarkable ability to automatically perform a wide range of prompted tasks, from writing to graphics to computer programming. ChatGPT is just one of many such tools now open to the public, and part of a continuum of AI development that dates back decades.

The robust recovery from the COVID‑19 recession lost momentum since 2022 while a cost of living crisis took hold as Russia’s war of aggression against Ukraine contributed to decades-high inflation in many countries. However, employment has held its ground, while unemployment rates have reached their lowest levels in decades. With few exceptions, inactivity rates are below pre‑pandemic levels, including among older adults. Labour markets remain tight in most countries, yet there are some signs of easing as the number of vacancies per unemployed has decreased slightly from historically high peaks.

The recovery from the COVID‑19 pandemic lost momentum in 2022, with employment and unemployment stabilising. Labour markets remain tight, despite signs of easing. In this context, the quality of jobs on offer has improved in some dimensions, but real wages are falling significantly in almost all OECD countries despite a pick-up in nominal wage growth. In most countries, profits have grown robustly, often more than nominal wages. Nominal minimum wages are keeping pace with inflation, but any real gains may fade rapidly if inflation remains high. In contrast, wages negotiated in collective agreements between employers or employers’ organisations and trade unions are reacting with some delay even in countries where the majority of workers are covered by a collective agreement, although a catch-up phase is expected in the coming quarters.

Progress in Artificial Intelligence (AI) has been such that, in some areas, its output has become indistinguishable from that of humans. These rapid developments, combined with the falling costs of producing and adopting these new technologies, suggest that OECD economies may be on the cusp of an AI revolution which could fundamentally change the workplace. While there are many potential benefits from AI, there are also significant risks that need to be urgently addressed. Policies and social dialogue can play a key role in mitigating these risks while not stifling the benefits. However, this requires better evidence, and this edition of the OECD Employment Outlook contributes to this goal.

Artificial Intelligence (AI) is the latest technology to stoke fears of rapid automation and job loss. This chapter reviews the current empirical literature on the employment effects of AI to date. It begins with a discussion of the progress in AI’s capabilities and what that implies for the tasks, occupations and jobs most exposed to these advances. An overview is then given of the findings of recent studies of the effect of AI on employment including econometric studies, as well as surveys and case studies of firms and workers. The chapter concludes by discussing policies that can minimise the possible displacement effects of AI while enhancing economic growth.

For many workers, the effects of artificial intelligence (AI) will be visible not in terms of lost employment but through changes in the tasks they perform at work and changes in job quality. This chapter reviews the current empirical evidence of the effect of AI on job quality and inclusiveness. For workers with the skills to complement AI, task changes should be accompanied by rising wages, but wages could decline for workers who find themselves squeezed into a diminished share of tasks due to automation. AI may affect job quality through other mechanisms as well. For example, it can reduce tedious or dangerous tasks, but it may also leave workers with a higher-paced work environment. The chapter further shows that using AI to support managers’ tasks affects the job quality of their subordinates. Finally, the chapter shows that using AI affects workplace inclusiveness and fairness, with implications for job quality.

The development and adoption of artificial intelligence (AI) will likely have a profound impact on labour markets, not only in terms of employment levels and job quality, but also on how work is organised, the type of tasks workers perform, and therefore on the skills that will be needed. This chapter discusses changes in skill requirements due to AI development and adoption and how adult learning systems should be adapted in response. The chapter reviews the available evidence on firm-provided training for AI. It makes the case for public intervention and presents examples of policies to promote training for AI. It also shows how AI technologies could be used to improve adult learning systems and concludes by discussing avenues for future research.

This chapter provides an overview of countries’ policy action affecting the development and use of artificial intelligence (AI) in the workplace. It looks at public policies to protect workers’ fundamental rights, ensure transparency and explainability of AI systems, and clarify accountability across the AI value chain. It explores how existing non-AI-specific laws – such as those pertaining anti-discrimination and data protection – can serve as a foundation for the governance of AI used in workplace settings. While in some countries, courts have successfully applied these laws to AI-related cases in the workplace, there may be a need for AI- and workplace‑specific policies. To date, most countries primarily rely on soft law for AI-specific matters, but a number of countries are developing new AI-specific legislative proposals applicable to AI in the workplace.

Rapid advances in the development and adoption of artificial intelligence (AI) provide new opportunities but also raise fears about disruptive labour market and workplace transitions. This chapter examines the interlinked relationship between social dialogue and AI adoption in the labour market and workplaces. It highlights how social partners can facilitate the AI transition, for both workers and employers, while presenting new descriptive evidence and recent social partners’ initiatives related to AI diffusion. The chapter also discusses how AI adoption may affect social dialogue itself: while AI technologies could be used as an enabler for social partners’ goals and strategies, they may also pose new challenges to social dialogue, such as insufficient AI-related expertise and resources to respond to the AI transition. Based on these insights, the chapter presents key policy recommendations.

The tables of the statistical annex show data for all 38 OECD countries where available. Data for Argentina, Brazil, China, India, Indonesia and South Africa are compiled and included in a number of tables and in the Employment database (http://www.oecd.org/employment/database).