KAPSARC – Too Many of the Same: Occupational Crowding, AI, and Wages

The main theme of the document is the impact of artificial intelligence (AI) on the labor market in Saudi Arabia.

The study examines how AI-augmented professions can change labor market outcomes. Key findings include that professions heavily influenced and augmented by AI tend to receive higher wages. However, the benefits are unevenly distributed: some sectors are better prepared to integrate AI-ready workers than others. The service and construction sectors stand out for their ability to integrate AI-augmented roles with a positive impact on wages, whereas energy and manufacturing show signs of saturation with too many workers concentrated in AI-intensive professions. An important policy takeaway is that AI readiness in the Kingdom involves not only preparing more workers with AI skills but also ensuring their distribution in a way that strengthens economic productivity and supports wage growth.