AI Talent and Economic Growth: Insights from OECD Economies

Abstract

This study examines the relationship between AI talent concentration and economic growth across 34 OECD countries over the 2016–2024 period. As artificial intelligence increasingly reshapes labour markets and productive structures, understanding whether and how AI absorption translates into macroeconomic growth remains an open empirical question. We operationalise AI absorption through AI talent concentration, the share of LinkedIn members with AI engineering skills or AI-related occupations, disaggregated across eight economic sectors, and estimate its effect on GDP growth using two complementary panel estimators: Driscoll-Kraay fixed effects, which provide robust baseline estimates, and system GMM, which addresses the endogeneity arising from the reverse feedback between economic growth and AI talent attraction. The Driscoll-Kraay results show positive but largely insignificant associations between AI talent and growth, with only the Transportation and Logistics sector reaching marginal significance. The system GMM estimates reveal a strikingly different picture: once endogeneity is corrected, aggregate AI talent and manufacturing-specific AI talent exhibit negative and significant short-run effects on GDP growth, consistent with AI functioning as a structural transformation technology that imposes adjustment costs before delivering long-run productivity gains. Foreign direct investment emerges as the single most robust driver of short-run growth across all specifications. This study contributes to the literature by providing sector-level causal evidence on AI talent's growth effects within a homogeneous club of advanced economies, addressing the endogeneity challenge that most prior studies overlook. The findings carry policy implications for OECD governments seeking to calibrate AI talent strategies: simply accumulating AI skills is insufficient without the complementary institutional and structural conditions needed to convert AI capacity into growth.