A new study by the Economic and Social Research Institute (ESRI), in collaboration with the Department of Finance, suggests that the growing use of artificial intelligence (AI) in Irish businesses could result in job losses—particularly among highly educated workers.
The research highlights that high-skilled roles are especially exposed to AI-driven automation. In the short to medium term, approximately 7% of existing jobs may be displaced. At the same time, the shift toward AI is expected to slightly widen income inequality.
This divergence is driven by several factors: some workers may lose jobs where tasks can be partially automated, while others could see wage increases as AI boosts their productivity. Additionally, individuals with investments in businesses may benefit from higher returns, further concentrating wealth.
For those who remain employed, wages are expected to rise on average due to productivity gains. However, “returns to capital are also expected to increase, modestly on average, but with disproportionate benefits accruing to the highest-income households who hold most capital assets,” the report notes.
Overall, these combined effects are likely to reduce average household disposable income in the short term. The study emphasizes that “AI adoption will create winners and losers, at least in the short to medium-term,” particularly in a country like Ireland with a highly skilled workforce and a strong tech sector.
The analysis focuses on the current job landscape and does not account for potential new roles that AI could create. According to the ESRI, “the research focuses on the current occupational structure and could not take into account what new jobs or increased opportunities AI might generate in certain sectors.”
Jobs most vulnerable to automation include those involving tasks that AI can reliably perform, such as data processing, image recognition, and translation. Roles like IT technicians, clerical staff, and customer service workers are among those at higher risk.
By contrast, jobs that involve physical labor or direct human interaction—such as healthcare workers, farmers, construction workers, and waste collectors—are far less likely to be replaced. The report reiterates that “all AI adoption scenarios considered result in a small to moderate increase in household income inequality.”
On public finances, the findings suggest Ireland’s tax and welfare systems can cushion the immediate impact for lower-income households through increased supports and reduced tax burdens. However, outcomes will vary depending on how the labour market adapts.
If job losses remain limited or workers transition quickly into new roles, government revenues could increase due to higher productivity. But if displacement is significant, tax revenues may fall while welfare spending rises, placing strain on the Exchequer.
Karina Doorley of the ESRI noted that “the effect of AI on the labour market and the distribution of income is still highly uncertain,” adding that inequality is likely to increase as income becomes more polarized. She also stressed that “ensuring a speedy digital transition will minimise the inequality effects.”
Sorcha O’Connor from the Department of Finance underlined the importance of preparing the workforce for change, stating that “the widespread adoption of AI will likely boost productivity and raise living standards in the long-term.” She added that policymakers must ensure these gains are broadly shared, emphasizing the need for upskilling, retraining, and lifelong learning to help workers adapt.
