Does artificial intelligence help in improving human capital based educational development? Evidence from 29 countries

This study investigates how artificial intelligence (AI) influences human capital-based educational development (HCBED) across 29 countries from 2017 to 2021. Our findings reveal four key insights: (1) There is a positive relationship between AI and HCBED. (2) The magnitude of AI’s impact on HCBED differs between developing and developed countries and more pronounced during the COVID-19 period than in non-COVID periods. (3) In addition to advancements in the education sector, AI developments in other fields can also contribute to improvements in HCBED. (4) The mechanism tests confirm that, on the one hand, AI enhances HCBED by intensifying wage inequality, thereby incentivizing individuals to acquire essential skills and education to remain competitive in future labor markets. On the other hand, AI could widen existing education disparities, ultimately hindering HCBED. This paper offers new evidence and policy suggestions on how societies can coexist with AI and leverage its capabilities to foster HCBED. • The role of artificial intelligence in human capital-based educational development (HCBED) across countries is determined. • The educational development trends within the human capital framework demonstrate stability and gradual cumulative growth in recent years. • In addition to advancements in the education sector, AI development in other fields can also contribute to improvements in HCBED. • AI’s effect on HCBED is stronger in developed countries and during the COVID-19 period. • AI can also influence HCBED by altering economic inequity and educational disparities.