Artificial intelligence and the labour market: The transition has begun

Artificial intelligence has rapidly spread across the Danish labour market, marking the beginning of a significant economic transition. Based on unique data from Denmark, firms that began using artificial intelligence during 2023 and 2024 subsequently experienced lower employment growth compared to comparable businesses that did not adopt the technology. Despite this shift at the firm level, total employment overall has not seen major changes.

Understanding these dynamics is crucial because artificial intelligence is expected to impact both productivity and employment in the coming years. Although the technology is still at an early stage and its future development involves considerable uncertainty, these factors are central for assessing the productive capacity of the economy, wage and employment trends, and the broader macroeconomic outlook.

By mid-2025, firms that introduced artificial intelligence showed employment levels roughly eleven percent lower than their prior historical trends would suggest, relative to non-using firms. However, a falling relative trend does not necessarily mean that total employment within an individual firm is actually dropping, but rather that its growth slows down compared to baseline expectations.

Ultimately, Denmark is well positioned to benefit from the ongoing technological shift. This favorable standing is supported by the country's flexible labour market and high level of widespread digitalisation, even as the exact path of future employment development remains uncertain.