AI's Effect on Employment Displacement and the Future of Work

Abstract

This study examines the impact of AI on employment displacement and future workforce dynamics, highlighting shifts across key industries, wage disparities, and the rising demand for digital skills. AI-driven automation has led to increased efficiency and productivity but also poses challenges by displacing routine jobs, especially in manufacturing, finance, healthcare, and retail. High-skill, AI-centric roles are growing, leading to wage polarization as digital skills become essential for job stability and advancement. Policy measures—such as investment in reskilling, support for income transitions, ethical AI regulations, and human-AI collaboration—are recommended to foster a balanced workforce adaptation and address long-term implications of AI integration on employment.