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Will the Mass Migration Lead to Increased Motivation of AI Adoption?A Theoretical Analysis Based on Acemoglu Model

Bagheri, Amir Masoud | 2025

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  1. Type of Document: M.Sc. Thesis
  2. Language: Farsi
  3. Document No: 57890 (44)
  4. University: Sharif University of Technology
  5. Department: Management and Economics
  6. Advisor(s): Rahmati, Mohammad Hossein
  7. Abstract:
  8. This research investigates the impact of mass labor migration on the incentives for adopting artificial intelligence (AI) technologies in industries. The study adopts a theoretical framework based on the model introduced by Acemoglu and Restrepo in their seminal 2016 paper. In the modeling framework of this research, there is a representative firm and a technology monopolist. The representative firm operates under a task-based production function, which allows the substitution of workers’ tasks with machines powered by AI, up to the technological capacity available. The technology monopolist determines the technological capacity of the firm, provided that it has sufficient incentive to develop and supply the technology. The inclusion of the technology monopolist and its two-layer cost function in the model enables the endogenous determination of the equilibrium level of AI penetration across the spectrum of tasks contributing to the firm’s final product. The results of the study indicate that mass labor migration significantly increases the incentive for AI adoption in firms. Furthermore, in scenarios where sufficient infrastructure for the development and adoption of AI exists, the decline in production levels and per capita output is considerably less severe compared to situations where such infrastructure is absent, and industries face the full brunt of the adverse effects of mass labor migration. This research holds particular policy making implications, especially in the context of Iran’s current economic conditions. In recent years, Iran’s economy has been grappling with the challenges of mass labor migration, which has worsened over time. According to the latest official surveys, only 15% of the Iranian population does not consider emigration, highlighting the shift from terms such as "brain drain" or "elite migration" to the more encompassing "mass migration." The findings of this study emphasize not only the potential harms of mass labor migration but also its possible opportunities. In many developed countries, AI penetration and its expansion to equilibrium levels face significant human-related challenges, particularly due to labor market conditions. However, given the unique characteristics of Iran’s labor market, the results derived from Proposition (1) in this research may offer new policy recommendations for reshaping the approach to AI policy. Additionally, the results of Proposition (2) underscore the pivotal role of the National Artificial Intelligence Organization of Iran in maintaining production levels during periods of mass labor migration
  9. Keywords:
  10. Artificial Intelligence ; Artificial Intelligence Policy Making ; Mass Migration ; Task-Based Production Function ; Immigration Policies

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