The adjustment of the Danish labour market to AI has begun

A new study examining Denmark shows how the local labour market is adjusting to the rapid adoption of artificial intelligence. Denmark provides an ideal setting for this research because of its fluid labour market and dramatic increase in AI usage, with surveyed firms reporting AI adoption jumping from 15 percent in 2023 to 59 percent in 2026. This growth is driven primarily by generative AI tools used for writing text and code.

Despite this rapid uptake, the overall employment effect remains very small so far. Early AI-adopting small firms employ less than two percent of all Danish workers, meaning their employment shortfall amounts to only a fraction of a percent of total national employment over a two-year period. Because the aggregate impact is so small, traditional industry-level data cannot detect it, and the signal is only visible through high-frequency monthly administrative data.

The findings reveal that AI adoption primarily slows down hiring in smaller firms and negatively affects the job prospects of new labour-market entrants. Consequently, researchers advise policymakers to focus on hiring and market entry rather than aggregate employment or unemployment figures when monitoring artificial intelligence impacts. Additionally, statistical offices must continue surveying firms about AI use and link those responses to administrative registers at high frequencies to capture these subtle shifts.