Generative AI and Jobs in Latin America: Boosting Productivity or Widening Gaps?

A groundbreaking policy paper produced by the World Bank in collaboration with the International Labour Organization explores how generative artificial intelligence (Gen AI) is poised to transform the labor markets across Latin America and the Caribbean. The study is the first in the region to systematically examine the potential implications of Gen AI on jobs, productivity, and inequality. While much of the global discourse on AI has centered on high-income economies, this research shifts the lens toward one of the most unequal and economically diverse regions in the world, raising critical questions about inclusion, opportunity, and preparedness.

Who’s Most Exposed? A Divided Landscape

The report finds that between 30% and 40% of jobs in Latin America and the Caribbean are exposed in some form to Gen AI. However, exposure varies dramatically based on geography, income level, and educational attainment. Jobs in urban areas, within the formal sector, and those requiring higher education are more likely to be affected, often in ways that can enhance productivity and efficiency. In contrast, rural and lower-income regions, where jobs are more informal and digital connectivity is often weak, remain largely unexposed. While this might seem like a shield against disruption, it also means workers in these regions are at risk of being left behind in the AI-powered evolution of work.

Opportunities with Limitations: The Digital Infrastructure Gap

Although the study suggests that between 8% and 12% of jobs in the region could see meaningful productivity improvements from Gen AI, nearly half of these, some 17 million jobs, lack the digital infrastructure necessary to benefit. In essence, while the potential for transformation exists, many workers and employers remain disconnected from the technological foundations needed to unlock it. Internet access, reliable devices, and digital literacy are not evenly distributed across the region, turning what could be a productivity boon into a barrier for inclusive development. This glaring infrastructure gap underscores the need for massive investments in digital connectivity, particularly in underserved areas.

Automation Anxiety: Who's at Risk?

The flip side of AI-driven productivity is the looming threat of automation. The analysis estimates that around 2% to 5% of jobs in the region are at risk of being fully automated by Gen AI. Strikingly, these are not necessarily the lowest-skilled jobs. Younger, more educated workers in urban areas, especially women, appear to be among the most exposed. Women, in particular, are twice as likely as men to occupy jobs that could be replaced by Gen AI, revealing a concerning gender dimension to the technological disruption. This disproportionate vulnerability could reinforce existing gender inequalities unless deliberate efforts are made to design inclusive labor and technology policies.

Adding to the complexity, between 13% and 22% of jobs fall into a middle category where the effects of Gen AI are uncertain. These jobs may be automated, augmented, or remain largely unchanged, depending on how quickly technology evolves, how adaptable workers prove to be, and what kind of supportive policies are put in place. This ambiguity presents both a challenge and an opportunity for governments across the region. With the right interventions, these roles could become testbeds for human-AI collaboration. Without them, they could slide into obsolescence.

Building Resilience: A Policy Blueprint for the Future

The report calls for a proactive, inclusive policy response to ensure that the benefits of Gen AI are widely shared. First and foremost, improving digital infrastructure is imperative. Without basic internet access and reliable technological tools, many countries in the region will be unable to make the leap into an AI-enabled economy. Equally important is the expansion of digital skills training, particularly among vulnerable groups such as women and informal workers, so that more people can thrive in AI-augmented roles rather than being displaced by them.

Another major recommendation is the creation of high-frequency, detailed labor market data systems. These would allow policymakers to go beyond static snapshots of exposure and monitor real-time impacts of AI adoption, from job creation and displacement to wage shifts and changes in occupational structures. With timely data, governments can craft targeted and evidence-based interventions, rather than reactive or generalized ones.

Social protection systems also need to evolve. Traditional safety nets must be modernized to reflect the realities of a digitizing labor market, where gig work, remote jobs, and automation-induced transitions are becoming increasingly common. This involves strengthening unemployment insurance, retraining programs, and legal frameworks that safeguard workers in AI-affected industries.

The Road Ahead: A Test of Equity and Innovation

As the findings feed into the upcoming World Development Report on AI, the broader global implications of this research are clear. But for Latin America and the Caribbean, the stakes are particularly high. The region stands at a crossroads: with strategic investments, bold policy choices, and a commitment to digital inclusion, Gen AI could catalyze equitable economic growth. Without such efforts, however, it risks deepening existing divides, marginalizing vulnerable populations, and squandering a rare opportunity to leapfrog into a more productive future. The challenge now is not whether Gen AI will impact the region, but whether leaders can shape that impact for the greater good.