Artificial intelligence (AI) is rapidly transforming the way we live and work, affecting a wide range of industries and job markets. In this research paper, the focus will be on exploring the potential impact of AI on the future of work and the labor market. This study will examine the current state of AI adoption in various industries, the expected growth of AI usage, and the potential consequences of this growth for the job market, including the displacement of certain jobs, the creation of new jobs, and changes in the skill requirements for workers. Additionally, the paper will examine the ethical considerations surrounding AI and its impact on the workforce, including issues such as job loss, income inequality, and the responsibilities of businesses and governments in managing the transition to an AI-powered workforce. The impact of the implementation of artificial intelligence (AI) on workers’ experiences remains under examined. Although AI-enhanced processes can benefit workers (e.g., by assisting with exhausting or dangerous tasks), they can also elicit psychological harm (e.g., by causing job loss or degrading work quality). Given AI’s uniqueness among other technologies, resulting from its expanding capabilities and capacity for autonomous learning, we propose a functional identity framework to examine AI’s effects on people’s work-related self-understandings and the social environment at work. We argue that the conditions for AI to either enhance or threaten a worker\'s sense of identity derived from their work depends on how the technology is functionally deployed (by complementing tasks, replacing tasks, and/or generating new tasks) and how it affects the social fabric of work. Also, how AI is implemented and the broader social validation context play a role. We conclude by outlining future research directions and potential application of the proposed framework to organizational practice.
Introduction
Artificial intelligence (AI) is rapidly transforming technology and society by enhancing efficiency, accuracy, and productivity across multiple industries such as healthcare, finance, and retail. While AI automates repetitive tasks, it also creates new job opportunities, especially in data analysis and AI development. This dual impact sparks debate about the future of work, job displacement, and the evolving nature of employment.
The research explores AI’s effects on various sectors, emphasizing both benefits and challenges, including ethical concerns, job market shifts, income inequality, and workforce reskilling needs. AI differs from previous technologies through its advanced learning capabilities and data-driven decision-making, though it remains "narrow" in scope—specialized but not fully general intelligence.
The study introduces a functional-identity framework to understand AI’s impact on work tasks and workers' identities. AI can enhance, replace, or create job tasks, influencing workers' self-perception, well-being, and social dynamics at work. Identity shifts due to AI can either threaten or expand workers’ roles depending on how changes are implemented and socially validated.
The literature highlights that automation and AI improve productivity but also cause job displacement, requiring workforce adaptation through reskilling. Successful integration of AI depends on balancing technological efficiency with employee well-being and ethical governance. When introduced thoughtfully, AI can support existing human tasks, fostering new skills and positive identity transformations among workers.
Conclusion
Our framework highlights just how crucial identity is when it comes to understanding how workers respond to AI implementation and the results that follow. When AI changes alter or eliminate aspects of work that are important to people\'s identities, or when they limit the chances for individuals to express those identities, the risk of identity threat increases significantly (Craig et al., 2019; Petriglieri, 2011). On the flip side, if AI changes help people get closer to their ideal work selves or improve their ability to cope with job-related challenges and foster positive self-definitions, then we’re more likely to see beneficial shifts in work-related identity (Endacott, 2021).
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