Publication:
Buffer or Bottleneck? Employment Exposure to Generative AI and the Digital Divide in Latin America

Loading...
Thumbnail Image
Files in English
English PDF (4.3 MB)
726 downloads
English Text (127.66 KB)
35 downloads
Published
2024-08-01
ISSN
Date
2024-08-01
Author(s)
Gmyrek, Paweł
Garganta, Santiago
Editor(s)
Abstract
Empirical evidence on the potential impacts of generative artificial intelligence (GenAI) is mostly focused on high-income countries. In contrast, little is known about the role of this technology on the future economic pathways of developing economies. This paper contributes to fill this gap by estimating the exposure of the Latin American labor market to GenAI. It provides detailed statistics of GenAI exposure between and within countries by leveraging a rich set of harmonized household and labor force surveys. To account for the slower pace of technology adoption in developing economies, it adjusts the measures of exposure to GenAI by using the likelihood of accessing digital technologies at work. This is then used to assess the extent to which the digital divide across and within countries will be a barrier to maximize the productivity gains among occupations that could otherwise be augmented by GenAI tools. The findings show that certain characteristics are consistently correlated with higher exposure. Specifically, urban-based jobs that require higher education, are situated in the formal sector, and are held by individuals with higher incomes are more likely to come into interaction with this technology. Moreover, there is a pronounced tilt toward younger workers facing greater exposure, including the risk of job automation, particularly in the finance, insurance, and public administration sectors. When adjusting for access to digital technologies, the findings show that the digital divide is a major barrier to realizing the positive effects of GenAI on jobs in the region. In particular, nearly half of the positions that could potentially benefit from augmentation are hampered by lack of use of digital technologies. This negative effect of the digital divide is more pronounced in poorer countries.
Link to Data Set
Citation
Gmyrek, Paweł; Winkler, Hernán; Garganta, Santiago. 2024. Buffer or Bottleneck? Employment Exposure to Generative AI and the Digital Divide in Latin America. Policy Research Working Paper; 10863. © World Bank. http://hdl.handle.net/10986/41984 License: CC BY 3.0 IGO.
Associated URLs
Report Series
Report Series
Other publications in this report series
  • Publication
    Gender Gaps in the Performance of Small Firms: Evidence from Urban Peru
    (Washington, DC: World Bank, 2025-09-23) Celiku, Bledi; Ubfal, Diego; Valdivia, Martin
    This paper estimates the gender gap in the performance of firms in Peru using representative data on both formal and informal firms. On average, informal female-led firms have lower sales, labor productivity, and profits compared to their male-led counterparts, with differences more pronounced when controlling for observable determinants of firm performance. However, gender gaps are only significant at the bottom of the performance distribution of informal firms, and these gaps disappear at the top of the distribution of informal firms and for formal firms. Possible explanations for the performance gaps at the bottom of the distribution include the higher likelihood of small, female-led firms being home-based, which is linked to lower profits, and their concentration in less profitable sectors. The paper provides suggestive evidence that household responsibilities play a key role in explaining the gender gap in firm performance among informal firms. Therefore, policies that promote access to care services or foster a more equal distribution of household activities may reduce gender productivity gaps and allow for a more efficient allocation of resources.
  • Publication
    Global Poverty Revisited Using 2021 PPPs and New Data on Consumption
    (Washington, DC: World Bank, 2025-06-05) Foster, Elizabeth; Jolliffe, Dean Mitchell; Lara Ibarra, Gabriel; Lakner, Christoph; Tettah-Baah, Samuel
    Recent improvements in survey methodologies have increased measured consumption in many low- and lower-middle-income countries that now collect a more comprehensive measure of household consumption. Faced with such methodological changes, countries have frequently revised upward their national poverty lines to make them appropriate for the new measures of consumption. This in turn affects the World Bank’s global poverty lines when they are periodically revised. The international poverty line, which is based on the typical poverty line in low-income countries, increases by around 40 percent to $3.00 when the more recent national poverty lines as well as the 2021 purchasing power parities are incorporated. The net impact of the changes in international prices, the poverty line, and new survey data (including new data for India) is an increase in global extreme poverty by some 125 million people in 2022, and a significant shift of poverty away from South Asia and toward Sub-Saharan Africa. The changes at higher poverty lines, which are more relevant to middle-income countries, are mixed.
  • Publication
    Intergenerational Income Mobility around the World
    (Washington, DC: World Bank, 2025-07-09) Munoz, Ercio; Van der Weide, Roy
    This paper introduces a new global database with estimates of intergenerational income mobility for 87 countries, covering 84 percent of the world’s population. This marks a notable expansion of the cross-country evidence base on income mobility, particularly among low- and middle-income countries. The estimates indicate that the negative association between income mobility and inequality (known as the Great Gatsby Curve) continues to hold across this wider range of countries. The database also reveals a positive association between income mobility and national income per capita, suggesting that countries achieve higher levels of intergenerational mobility as they grow richer.
  • Publication
    The Macroeconomic Implications of Climate Change Impacts and Adaptation Options
    (Washington, DC: World Bank, 2025-05-29) Abalo, Kodzovi; Boehlert, Brent; Bui, Thanh; Burns, Andrew; Castillo, Diego; Chewpreecha, Unnada; Haider, Alexander; Hallegatte, Stephane; Jooste, Charl; McIsaac, Florent; Ruberl, Heather; Smet, Kim; Strzepek, Ken
    Estimating the macroeconomic implications of climate change impacts and adaptation options is a topic of intense research. This paper presents a framework in the World Bank's macrostructural model to assess climate-related damages. This approach has been used in many Country Climate and Development Reports, a World Bank diagnostic that identifies priorities to ensure continued development in spite of climate change and climate policy objectives. The methodology captures a set of impact channels through which climate change affects the economy by (1) connecting a set of biophysical models to the macroeconomic model and (2) exploring a set of development and climate scenarios. The paper summarizes the results for five countries, highlighting the sources and magnitudes of their vulnerability --- with estimated gross domestic product losses in 2050 exceeding 10 percent of gross domestic product in some countries and scenarios, although only a small set of impact channels is included. The paper also presents estimates of the macroeconomic gains from sector-level adaptation interventions, considering their upfront costs and avoided climate impacts and finding significant net gross domestic product gains from adaptation opportunities identified in the Country Climate and Development Reports. Finally, the paper discusses the limits of current modeling approaches, and their complementarity with empirical approaches based on historical data series. The integrated modeling approach proposed in this paper can inform policymakers as they make proactive decisions on climate change adaptation and resilience.
  • Publication
    The Impact of Atlantic Hurricanes on Business Activity
    (Washington, DC: World Bank, 2025-09-22) Agarwal, Sumit; Choudhury, Smarajit Paul; Fan, Mingxuan; Klapper, Leora
    This paper quantifies the short-run economic impact of 21 Atlantic hurricanes on U.S. local business activity from 2017 to 2024 using anonymized Mastercard transaction data aggregated by ZIP code. On average, hurricanes reduce merchant sales by 12.4 percent during the preparation, impact, and recovery phases—an estimated US$1.38 billion in lost revenue per storm. Substitution in spending across nearby areas or large online platforms is limited, indicating widespread local consumption declines. Economic disruption varies more by industry than storm intensity, with independent stores hit harder than chains. Local businesses with larger online presence face smaller, shorter sales declines, showing greater resilience.
Journal
Journal Volume
Journal Issue

Related items

Showing items related by metadata.

  • Publication
    Republic of Tunisia : Information and Communications Technology Contribution to Growth and Employment Generation, Volume 1. Policy Note
    (Washington, DC, 2002-03) World Bank
    This policy note is the first of two volumes, drafted in conjunction with a more detailed technical report. It was prepared in response to a request by the Government of Tunisia for Bank assistance to formulate an ICT development strategy, in accordance with the targets set in the Government of Tunisia's 10th development plan. The policy note highlights current constraints to ICT sector development and proposes measures to eliminate them. It should be read in conjunction with the broader strategy report (volume two: technical report), which contains complementary data and technical information. The Government objectives were conveyed to the World Bank team in May 2001. The strategy is aimed at bolstering the country's emerging ICT sector and maximizing its ability to compete in local, regional, and global markets. In this context, the major objectives of the ICT strategy are to: (a) maximize the ICT contribution to growth and employment generation; (b) position Tunisia in the global ICT market; and (c) integrate ICT into the Tunisian economy. Indirect issues of the ICT impact on productivity and competitiveness are marginally treated in this note. The report compares the state of ICT development in Tunisia that of other economies, taking into account Tunisia's relative strengths and weaknesses in developing a competitive and robust ICT industry. The report outlines the pillars of a strategy and specifies measures to be implemented by the Government, the private sector, and other stakeholders.
  • Publication
    Republic of Tunisia : Information and Communications Technology Contribution to Growth and Employment Generation, Volume 2. Technical Report
    (Washington, DC, 2002-03) World Bank
    This policy note is the first of two volumes, drafted in conjunction with a more detailed technical report. It was prepared in response to a request by the Government of Tunisia for Bank assistance to formulate an ICT development strategy, in accordance with the targets set in the Government of Tunisia's 10th development plan. The policy note highlights current constraints to ICT sector development and proposes measures to eliminate them. It should be read in conjunction with the broader strategy report (volume two: technical report), which contains complementary data and technical information. The Government objectives were conveyed to the World Bank team in May 2001. The strategy is aimed at bolstering the country's emerging ICT sector and maximizing its ability to compete in local, regional, and global markets. In this context, the major objectives of the ICT strategy are to: (a) maximize the ICT contribution to growth and employment generation; (b) position Tunisia in the global ICT market; and (c) integrate ICT into the Tunisian economy. Indirect issues of the ICT impact on productivity and competitiveness are marginally treated in this note. The report compares the state of ICT development in Tunisia that of other economies, taking into account Tunisia's relative strengths and weaknesses in developing a competitive and robust ICT industry. The report outlines the pillars of a strategy and specifies measures to be implemented by the Government, the private sector, and other stakeholders.
  • Publication
    The Quality of Jobs in Latin America and the Caribbean
    (Washington, DC: World Bank, 2024-11-13) Barreto, Karen; Winkler, Hernán; Diaz Bonilla, Carolina; Sanchez, Diana
    The creation of more and better jobs has been a key driver of poverty and inequality reduction.However, while estimates on the number of jobs are available for most countries,comprehensive measures of job quality are not typically reported systematically. This notecontributes to the filling of this gap by studying patterns of job quality across countries and overtime in Latin America and the Caribbean (LAC). This study uses the Job Quality Index (JQI) basedon Brummundi, Mann, and Rodriguez-Castelan (2018), which incorporates four keyemployment characteristics that are key to assessing job quality: earnings, benefits, security,and satisfaction.
  • Publication
    Unlocking the Potential of Digital Public Infrastructure (DPI) in Latin America and the Caribbean
    (Washington, DC: World Bank, 2024-08-06) World Bank
    Digital Public Infrastructure (DPI) first came to wider public attention at a session on the future of digital cooperation during the UN General Assembly in 2022. During 2023, international interest in DPI grew during India’s Presidency of the G20. The World Bank defines DPI as foundational and re-usable digital platforms and building blocks such as digital ID, digital payments, and data sharing - that underpin the development and delivery of trusted, digitally-enabled services across the public and private sector. Although India and Estonia are the most often cited country examples of DPI in practice, digital public platforms are also emerging in LAC. This report produced under a joint Memorandum of Understanding between the World Bank Group (WBG) and the Inter-American Development Bank (IADB) aims to help improve digital infrastructure and connectivity to drive stronger results for people living in LAC. Its objective is to highlight the state of the potential for DPI across the LAC region, including understanding policymaker’s awareness and acceptance of DPI, and the maturity of DPI building blocks across the region. It aims to connect a long-standing discussion in LAC around effective digital transformation with emerging global DPI discourse, and at the same time the report explores specifically how, and where, DPI manifests in LAC and how it can be helpful in future.
  • Publication
    Digitalization and Inclusive Growth
    (Washington, DC: World Bank, 2024-10-15) Nayyar, Gaurav; Pleninger, Regina; Vorisek, Dana; Yu, Shu
    This paper summarizes the evidence on the growth and distributional effects of digitalization through four channels: average productivity growth, employment and wages, access to markets, and government finances. First, digitalization has increased average productivity growth by better matching demand and supply, improving the efficiency of business processes, and boosting the accumulation of intangible capital. For developing economies, the productivity gains from “smart” automation and artificial intelligence that reduce labor costs may be lower than from the previous wave of information and communications technologies, which improved the matching of sellers to buyers by reducing search and coordination costs. Second, there is little evidence that use of information and communications technologies has reduced aggregate employment or resulted in job polarization in developing economies, unlike the experience of advanced economies. However, distributional challenges within countries might increase to the extent that “smart” robots and artificial intelligence need complementary skills. Third, digitalization has enhanced market access for rural households, small firms, and unbanked populations in developing economies through improving information flows. Fourth, digitalization has improved the efficiency of government spending on, and revenue mobilization for, public services and welfare programs through its effect on transparency, accountability, simplification of bureaucratic processes, and adoption of new delivery models.

Users also downloaded

Showing related downloaded files

  • Publication
    Increasing Women’s Representation in Business Leadership
    (Washington, DC: World Bank, 2023-06-09) Salazar, Loty; Moline, Ann
    Better gender balance in business leadership is inextricably linked with achieving the Sustainable Development Goals (SDGs). By definition, attainment of SDG 5, gender equality, is impossible without women’s equal representation at the top. Women leaders are levers of change for all SDGs, as they prioritize social protections, health, education, climate, and inclusivity. Having more women in leadership is positively correlated with higher environmental, social, and governance (ESG) standards, leading to improved business performance and inclusive economic growth. Yet, enormous gender gaps in corporate leadership persist. Globally, women hold only 19.7 percent of board seats, and 6.7 percent of board chair, 5 percent of CEO, and 15.7 percent of CFO positions. Unconscious and cultural biases, lack of opportunities, and other workforce barriers can limit women’s professional aspirations and narrow leadership paths. While direct cause-and-effect links cannot always be demonstrated, World Bank Group interventions that address the root causes of gender gaps in business leadership offer strong potential for progress. This note examines World Bank Group experience and provides several strategies that other programs can consider to accelerate the pace at which women ascend to senior leadership positions.
  • Publication
    Women, Business and the Law 2016
    (Washington, DC: World Bank, 2015-09-09) World Bank Group
    By measuring where the law treats men and women differently, this book shines a light on how women's incentives or capacity to work are affected by the legal environment and provides a basis for improving regulation. The fourth edition in a series, this book examines laws and regulations affecting women’s prospects as entrepreneurs and employees in 173 economies, across seven areas: accessing institutions, using property, getting a job, providing incentives to work, building credit, going to court, and protecting women from violence. The report's quantitative indicators are intended to inform research and policy discussions on how to improve women's economic opportunities and outcomes.
  • Publication
    Democratic Republic of Congo Urbanization Review
    (Washington, DC: World Bank, 2018) World Bank; Ranarifidy, Dina
    The Democratic Republic of Congo has the third largest urban population in sub-Saharan Africa (estimated at 43% in 2016) after South Africa and Nigeria. It is expected to grow at a rate of 4.1% per year, which corresponds to an additional 1 million residents moving to cities every year. If this trend continues, the urban population could double in just 15 years. Thus, with a population of 12 million and a growth rate of 5.1% per year, Kinshasa is poised to become the most populous city in Africa by 2030. Such strong urban growth comes with two main challenges – the need to make cities livable and inclusive by meeting the high demand for social services, infrastructure, education, health, and other basic services; and the need to make cities more productive by addressing the lack of concentrated economic activity. The Urbanization Review of the Democratic Republic of Congo argues that the country is urbanizing at different rates and identifies five regions (East, South, Central, West and Congo Basin) that present specific challenges and opportunities. The Urbanization Review proposes policy options based on three sets of instruments, known as the three 'I's – Institutions, Infrastructures and Interventions – to help each region respond to its specific needs while reaping the benefits of economic agglomeration The Democratic Republic of the Congo is at a crossroads. The recent decline in commodity prices could constitute an opportunity for the country to diversify its economy and invest in the manufacturing sector. Now is an opportune time for Congolese decision-makers to invest in cities that can lead the country's structural transformation and facilitate greater integration with African and global markets. Such action would position the country well on the path to emergence.
  • Publication
    Rwanda Economic Update, April 2025
    (Washington, DC: World Bank, 2025-04-01) World Bank
    Rwanda’s economy remained resilient in 2024, with GDP growth reaching 8.9 percent, driven by strong performances in services, industry, and a rebound in agriculture. Despite strong export growth, the current account deficit widened due to decline in official transfers. This necessitated continued reliance on forex inflows from FDI and external concessional borrowing. Inflation moderated, averaging 4.8 percent in 2024, due to lower food prices and tight monetary policy, allowing the central bank to ease interest rates by reducing the Central Bank Rate (CBR) from 7.5 percent to 6.5 percent in 2024. The fiscal position improved with higher tax collections supporting fiscal consolidation, though public debt is projected to peak at 80 percent of GDP in 2025, despite reduced borrowing needs, before gradually declining, driven by past deficits and exchange rate depreciation. Rwanda’s agriculture sector remains a cornerstone of the economy, employing 43 percent of the workforce and contributing 27 percent to GDP. Despite diversification beyond traditional cash crops like coffee and tea, agricultural productivity remains constrained by land fragmentation, limited mechanization, post-harvest losses, and climate change impacts. While agricultural exports account for 37 percent of total export revenues, trade remains vulnerable to price fluctuations, and regional market integration is underdeveloped. The sector has much more potential to deliver higher growth, better jobs and boost forex earnings. Part 2 of this report focuses on how to unlock this potential. It examines key drivers of agricultural productivity, including input use, irrigation expansion, mechanization, and digital innovation, while evaluating persistent challenges such as limited access to finance, weak extension services, and climate vulnerability. It assesses policy efforts under the Fifth Strategic Plan for Agriculture Transformation (PSTA5), which aims to modernize production, enhance market access, and transition toward a more private sector-driven model. Key recommendations include strengthening seed systems, expanding irrigation, investing in agro-logistics, improving financial access, and implementing regulatory reforms to attract private investment. By addressing these structural bottlenecks and aligning policies with regional and global trade opportunities in the East African Community (EAC) and the African Continental Free Trade Area (AfCFTA), Rwanda can build a resilient, competitive, and sustainable agri-food sector that supports economic transformation and food security.
  • Publication
    Vietnam
    (World Bank, Hanoi, 2020-05-01) World Bank
    Following from Vietnam’s ratification of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in late 2018 and its effectiveness from January 2019, and the European Parliament’s recent approval of the European Union-Vietnam Free Trade Agreement (EVFTA) and its subsequent planned ratification by the National Assembly in May 2020, Vietnam has further demonstrated its determination to be a modern, competitive, open economy. As the COVID-19 (Coronavirus) crisis has clearly shown, diversified markets and supply chains will be key in the future global context to managing the risk of disruptions in trade and in supply chains due to changing trade relationships, climate change, natural disasters, and disease outbreaks. In those regards, Vietnam is in a stronger position than most countries in the region. The benefits of globalization are increasingly being debated and questioned. However, in the case of Vietnam, the benefits have been clear in terms of high and consistent economic growth and a large reduction in poverty levels. As Vietnam moves to ratify and implement a new generation of free trade agreements (FTAs), such as the CPTPP and EVFTA, it is important to clearly demonstrate, in a transparent manner, the economic gains and distributional impacts (such as sectoral and poverty) from joining these FTAs. In the meantime, it is crucial to highlight the legal gaps that must be addressed to ensure that national laws and regulations are in compliance with Vietnam’s obligations under these FTAs. Readiness to implement this new generation of FTAs at both the national and subnational level is important to ensure that the country maximizes the full economic benefits in terms of trade and investment. This report explores the issues of globalization and the integration of Vietnam into the global economy, particularly through implementation of the EVFTA.