ARTIFICIAL INTELLIGENCE

“What is being eliminated [by AI] are often tasks done by new entries into the labor force – young people. Conversely, people with higher skills get better pay, spend more locally, and that ironically increases demand for low-skill jobs. This is bad news for recent … graduates.” – Kristalina Georgieva – Managing Director, IMF

Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), delivered this stark observation during a World Economic Forum Town Hall in Davos on 23 January 2026, amid discussions on ‘Dilemmas around Growth’. Speaking as AI’s rapid adoption accelerates, she highlighted a dual dynamic: the elimination of routine entry-level tasks traditionally filled by young graduates, coupled with productivity gains for higher-skilled workers that paradoxically boost demand for low-skill service roles.^1,2,5

Context of the Quote

Georgieva’s remarks form part of the IMF’s latest research, which estimates that AI will impact 40% of global jobs and 60% in advanced economies through enhancement, elimination, or transformation.^1,3 She described AI as a ‘tsunami hitting the labour market’, emphasising its immediate effects: one in ten jobs in advanced economies already demands new skills, often IT-related, creating wage pressures on the middle class while entry-level positions vanish.^1,2,5 This ‘accordion of opportunities’ sees high-skill workers earning more, spending locally, and sustaining low-skill jobs like hospitality, but leaves recent graduates struggling to enter the workforce.⁵

Backstory on Kristalina Georgieva

Born in 1953 in Sofia, Bulgaria, Kristalina Georgieva rose from communist-era academia to global economic leadership. She earned a PhD in economic modelling and worked as an economist before Bulgaria’s democratic transition. Joining the World Bank in 1993, she climbed to roles including Chief Economist for Europe and Central Asia, then Commissioner for International Cooperation, Humanitarian Aid, and Crisis Response at the European Commission (2010-2014). Appointed IMF Managing Director in 2019, she navigated the COVID-19 crisis, steering over USD 1 trillion in lending and advocating fiscal resilience. Georgieva’s tenure has focused on inequality, climate finance, and digital transformation, making her a authoritative voice on AI’s socioeconomic implications.^3,5

Leading Theorists on AI and Labour Markets

The theoretical foundations of Georgieva’s analysis trace to pioneering economists dissecting technology’s job impacts.

• David Autor: MIT economist whose ‘task-based framework’ (with Frank Levy) posits jobs as bundles of tasks, some automatable. Autor’s research shows AI targets routine cognitive tasks, polarising labour markets by hollowing out middle-skill roles while boosting high- and low-skill demand-a ‘polarisation’ mirroring Georgieva’s entry-level concerns.³
• Erik Brynjolfsson and Andrew McAfee: MIT scholars and authors of The Second Machine Age, they argue AI enables ‘recombinant innovation’, automating cognitive work unlike prior mechanisation. Their work warns of ‘winner-takes-all’ dynamics exacerbating inequality without policy interventions like reskilling, aligning with IMF calls for adaptability training.³
• Daron Acemoglu: MIT Nobel laureate (2024) who, with Pascual Restrepo, models automation’s ‘displacement vs productivity effects’. Their framework predicts AI displaces routine tasks but creates complementary roles; however, without incentives for human-AI collaboration, net job losses loom for low-skill youth.⁵

These theorists underpin IMF models, stressing that AI’s net employment effect hinges on policy: Northern Europe’s success in ‘learning how to learn’ exemplifies adaptive education over rigid skills training.⁵

Broader Implications

Georgieva urges proactive measures-reskilling youth, bolstering social safety nets, and regulating AI for inclusivity-to avert deepened inequality. Emerging markets face steeper skills gaps, risking divergence from advanced economies.^1,3,5 Her personal embrace of tools like Microsoft Copilot underscores individual agency, yet systemic reform remains essential for equitable growth.