Artificial intelligence and the labour market: The transition has begun

Analyses focus on current issues of particular relevance to Danmarks Nationalbank’s objectives. The analyses may also contain Danmarks Nationalbank’s recommendations. They include our projections for the Danish economy and our assessment of financial stability. Analyses are targeted at people with a broad interest in economic and financial matters.

Artificial intelligence and the labour market: The transition has begun

Artificial intelligence, AI, has become widespread in the Danish labour market in a short period of time. Based on unique Danish data, there are clear indications that firms that implement AI subsequently see lower employment growth than other comparable firms. By contrast, there have been no major changes in total employment. The future development of employment is subject to considerable uncertainty. Overall, the flexible labour market and widespread digitalisation mean that Denmark is well placed to benefit from AI.

Artificial intelligence is expected to affect both productivity and employment in the coming years. How quickly the effects materialise, and how they feed through, is subject to considerable uncertainty, not least because AI development is still at an early stage. These factors are central to assessing the economy's productive capacity, developments in employment and wages, and the broader macroeconomic outlook.

Firms that started using AI during 2023/24 have reduced their employment growth compared with firms that do not use AI

Employment growth for firms that started using AI in 2023/24, relative to other firms (deviation from trend)

The chart shows event-study estimates of the effect on employment of introducing AI at firm level in 2023/24. 95 per cent confidence intervals are marked in red. Example of interpretation: A firm had a given trend in employment in the years up to 2023. If the firm started using AI during 2023 or early 2024, its employment in mid-2025 was approximately 11 per cent lower than the 2023 trend would suggest, compared with the corresponding deviation from the trend in firms that did not use AI. A falling curve therefore does not necessarily mean that employment in the individual firm is falling.