Highly skilled workers have a window of opportunity to upskill in AI before their peers to command higher wages, a new Otago study led by Dr Murat Ungor shows.
Highly skilled workers would be wise to master artificial intelligence (AI) tools now to gain a competitive edge in the job market, a new Otago study shows.
The research, published in The Scottish Journal of Political Economy, finds AI-based education will better prepare highly skilled workers for the changing job market.
Corresponding author Dr Murat Ungor, from the Department of Economics, says as AI and automation become more sophisticated, the technologies will increasingly require human partners who can understand, use and manage them effectively.
Although many previous studies have explored how automation replaces tasks typically done by low-skilled labour, the Otago researchers shifted their focus to how an AI-based education can have a positive effect for highly skilled workers.
Dr Ungor cites the example of the three-time European champion of the board game Go, Fan Hui, who was defeated by an AI system in 2015 – the first time AI had triumphed over a human player.
However, once Fan Hui began upskilling by practising against AI, he was able to elevate his game and win his next European tournament easily.
“Fan Hui’s experience exemplifies how AI can be a powerful tool to reskill and upskill workers for the future,” Dr Ungor says.
“By strategically reskilling the workforce and fostering a deep understanding of AI technologies, we can ensure human capital not only survives but thrives alongside automation.”
Dr Ungor and his former Master’s student Rachael Grant developed a model showing how automation will lead to a rise in the skill premium.
It outlines five production factors: traditional physical capital (such as machines or assembly lines); automation capital (such as industrial robots); low skilled labour (such as assembly line workers); highly skilled labour with a traditional education background; and highly skilled labour with an AI-based education background.
The gap between wages of highly skilled workers and low-skilled workers will increase, with low-skilled wages falling while wages for highly skilled workers with a traditional or AI-based education initially rising.
Those who embrace AI-based education earlier potentially have a window of opportunity to command higher wages and stay competitive before the premium associated with those skills decreases as a larger pool of AI-skilled workers enter the job market.
“Think of it like a bonus for having expertise in working with AI tools,” Dr Ungor says.
The results highlight a clear call to action for New Zealand’s education and training landscape, Dr Ungor says.
“Educational institutions from primary to tertiary should undergo a shift to equip young New Zealanders with a broad and adaptable skillset.”
Policymakers and educational institutions should invest in a revamped education system that incorporates AI fundamentals, machine learning and data analysis into curriculums while still fostering critical thinking, problem-solving, and collaboration skills.
“By understanding how AI will impact skills and wages, we can develop educational and training programmes to help workers succeed in the future.”
Publication Details:
The AI Revolution with 21st Century Skills: Implications for the Wage Inequality and Technical Change
Rachael Grant, Murat Ungor
The Scottish Journal of Political Economy
Further information about Dr Murat Ungor can be found here:
https://www.otago.ac.nz/economics/staff/dr-murat-ungor
http://www.muratungor.com/
