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ABSTRACT
Changes in average wage are usually attributed to technological change in the past industrial revolutions. With the emergence and gradual explosion of artificial intelligence (AI) in the 4th industrial revolution, this paper applies panel vector autoregressive technique, with annual data from the World Bank and global economy from 2004 to 2017, to examine the effect of artificial intelligence on average wages in Southern Africa. Findings from the study show that artificial intelligence has a significant negative relationship with average wages but is positively associated with gross domestic product per capita (GDPC), unemployment and inflation. The study also finds inflation and GDPC to be positively associated with average wage. Based on the finding, policy direction focusing on wage stabilisation, redistribution of income, advance learning and skill development training that promote competitiveness to computerisation is recommended.
Acknowledgement
The support of the DST-NRF Centre of Excellence in Human Development towards this research/activity is hereby acknowledged. Opinions expressed, and conclusions arrived at, are those of the authors and are not necessarily to be attributed to the CoE in Human Development.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Correction Statement
This article has been republished with minor changes. These changes do not impact the academic content of the article.
Notes
1 See Wai et al., Citation2002; Fabio & Matteo, Citation2008; Gerardo et al., Citation2014 who used a panel vector autoregressive approach for country and regional level wage analysis.
2 Other sources include Breitung (2000) and Breitung & Das (2005).