capable of driving significant productivity gains. Unlike past technological shifts, generative AI may affect higher-wage occupations more profoundly, displacing roles such as educators and researchers while creating opportunities for lower-wage skills, potentially reducing income inequality. Its substantial cost-saving potential could foster a stronger productivity effect, improving aggregate labor demand and boosting economic growth.

However, the impact will likely vary based on regional and industrial factors. Countries with stronger labor protections, such as Germany, may experience a smoother transition as workers shift roles rather than lose employment outright, while regions dependent on highly affected industries, such as financial services, could face economic challenges. Policymakers may also need to reconsider tax structures to balance technological investment with workforce stability. If generative AI delivers on its promise of robust productivity growth, it could reverse decades of slowed labor demand while simultaneously reshaping the global workforce.

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