Fiscal Policy Can Help Broaden the Gains of AI to Humanity

Fiscal Policy Can Help Broaden the Gains of AI to Humanity

The Impact of Generative-AI on Public Services and Social Protection Policies

New generative-AI technologies show great promise in enhancing productivity and transforming public service delivery. However, the rapid pace and scale of this transformation also raise concerns about potential job losses and increased inequality.


A new IMF paper emphasizes the crucial role of fiscal policy in ensuring a fair distribution of benefits and opportunities from generative-AI. This necessitates significant upgrades to global social protection and tax systems.


Revamping Social Protection Policies: In the face of disruptive AI technologies, governments must adopt agile approaches to mitigate potential job displacements and inequality.


Lessons learned from previous waves of automation and IMF analyses suggest that enhancing unemployment insurance can soften the impact on displaced workers. Broadening coverage, improving portability of entitlements, and considering wage insurance are vital steps for effective policy responses.


Additionally, investments in sector-based training, apprenticeships, and upskilling programs are crucial to preparing the workforce for the jobs of the AI era. Comprehensive social assistance programs will be essential for workers experiencing long-term unemployment or reduced local labor demand due to automation.


For further information on the implications of AI on public services and social protection, visit