AI Dividend Clock

How the model works

1. Adoption follows a logistic curve S(t), delayed by each country's adoption lag.
2. Labor share falls from its current level: L = L₀ − ΔL·S, where ΔL = exposure × (σ−1)/σ × (1 − e^(−g/3)): σ is the substitution elasticity between AI and labor and g the AI growth boost, so the share falls further when AI substitutes for workers and grows faster, and rises when AI complements them. The Baseline growth boost of 1 point follows the IMF's 0.5–1 point estimate for advanced economies. Output per worker grows at the baseline rate plus the AI boost times the larger of S and the global spillover share of world adoption, so lagging countries still gain from AI-driven growth elsewhere.
3. A fraction of exposed jobs is displaced (D = Dmax·S). Re-employed workers earn the new-job pay ratio; the rest draw the existing safety net. Remaining wages fall with labor share and capture only part of AI's productivity gain. The default worker is the average across exposed jobs at the income you set; the other fates follow one person who loses their job at the country's adoption midpoint.
4. Redeploying AI profits has a cost: the capital response trims the AI growth boost and pushes some profits offshore. Pooled money from abroad loses value as it grows relative to GDP, through inflation and a stronger currency.
5. New capital income is (1−L)·Y − (1−L₀)·Y_cf. The redeployed share of the domestically taxable part is split equally among exposed workers, capped by tax headroom. A pooled share is split equally among exposed workers worldwide. Both arrive as flat dollar amounts, so they replace more of a low income than a high one.
6. AI-driven profits are split: the value-chain share goes to the global AI value chain and returns to each country by its share of AI-firm ownership, financial wealth, manufacturing, resources and data center capacity under the chosen mix; the rest stays with the domestic firms that adopted AI. The country can tax and redeploy what it captures.
7. What reaches workers is scaled by delivery efficiency. Well-being counts transfers at a discount and subtracts a non-income cost of joblessness that fades as norms adapt. Recovery dates are computed out to 2100.

Grounding and limits

• Exposure follows the IMF's estimate that about 60% of jobs in advanced economies, 40% in emerging markets and 26% in low-income countries are exposed, with about half of exposed jobs likely to be hurt rather than helped, through lower pay as well as lost jobs. Baseline therefore assumes 30% of exposed jobs are eliminated outright (IMF, 2024).
• The world labor share starts at 52.3%, the ILO's 2024 estimate (ILO via VOA). Country labor shares, tax ratios, GDP per person and typical pay are rounded approximations of recent data.
• Channel shares are rough estimates. Capital-market profits are assigned to the firms' owners: domestic investors keep what foreigners don't own, and the foreign-held share is split by how much each country's investors hold abroad, which favors deep capital markets like the US. Capital pools follow each country's share of world financial assets (the US holds about 45%, per Allianz). Manufacturing follows manufacturing value added, data centers follow hosted capacity (the US holds about 54% of hyperscale capacity, per Statista), and resource rents stay where the resources are, though states have historically struggled to capture them.
• Tax headroom is the gap to a 45% tax-to-GDP ceiling, about Denmark's 2024 level (OECD Revenue Statistics 2025), scaled by delivery efficiency.
• Adoption lag, delivery efficiency and safety-net replacement are judgment calls, which is why they stay adjustable.
• Still left out: new kinds of work that pull labor's share back up, cheaper AI-produced goods and services, rising asset prices, migration, and the effect of transfers on demand. Each of these would likely shorten recovery.