GenAI may reshape labour markets unevenly across countries: study

ISLAMABAD: Generative artificial intelligence is set to alter labour markets around the world, though its effects are expected to differ significantly between countries, according to a joint study by the International Labour Organisation and the World Bank.

The study, prepared as background research for the forthcoming World Development Report 2026, says developing economies could experience disruption faster than productivity gains because of digital gaps and differences in the way work is organised.

It describes this pattern in developing countries as a 'small buffer, big bottlenecks' dynamic. According to the study, workers in occupations exposed to automation are often already digitally connected and may therefore come under displacement pressure relatively quickly. By contrast, workers in jobs that could benefit from augmentation frequently do not have dependable internet access, limiting their ability to realise productivity gains.

Exposure differs across income groups

The report examines labour market exposure to GenAI in 135 countries, covering about two-thirds of global employment. It says differences in digital infrastructure and the composition of job tasks play a central role in determining how risks and opportunities are distributed between advanced and developing economies.

According to the findings, exposure to GenAI is higher in advanced economies, particularly in clerical and professional occupations. The study says around 30 to 32 per cent of employment in high-income countries is exposed to GenAI, while in low-income countries the figure is close to 1 to 15 per cent.

Although overall exposure is lower in developing countries, the study says these economies face structural constraints that limit their ability to benefit from the technology.

Risks for formal and entry-level jobs

In low- and lower-middle-income countries, the share of jobs vulnerable to automation is generally smaller. However, the study notes that these jobs often include formal and relatively better-quality service-sector positions, occupations largely held by women and younger workers, and entry-level clerical and administrative roles that have traditionally provided a route into decent work.

The study warns that this raises the possibility of a "white-collar bypass", in which office-based jobs that supported upward mobility and women’s participation in the labour force in advanced economies may not fully emerge in today’s developing countries.

A key conclusion of the study is that the digital divide will shape how GenAI affects workers. It says workers in jobs vulnerable to automation are often already online, even in low-income settings, meaning job losses could materialise fairly quickly. At the same time, many workers in roles with augmentation potential remain constrained by weak digital access.

The study adds that the jobs most at risk in lower-income countries tend to be comparatively higher-quality positions, including clerical and administrative work. These roles have historically served as pathways to decent employment, especially for women and young workers. The concern, it says, is that AI-led automation could close off those pathways.