ABSTRACT

The rapid advancement of artificial intelligence (AI) is reshaping contemporary labour markets, generating both opportunities and challenges within the digital economy. Although existing research has widely examined the effects of AI on employment dynamics, less attention has been given to the combined role of IT infrastructure and cybersecurity in shaping digital inequality. This study addresses this gap by analysing how AI adoption, IT infrastructure quality, and cybersecurity readiness influence labour market transformation and digital disparities across European Union countries. Using panel data from Eurostat, OECD, DESI, and cybersecurity-related indicators for EU Member States, the study develops a multidimensional framework that links technological, institutional, and socioeconomic factors. The empirical findings suggest that AI adoption is positively associated with digital inequality. However, stronger IT infrastructure and higher cybersecurity readiness mitigate this effect through moderating interactions, supporting a more inclusive labour market transformation. The study contributes to the literature by integrating previously fragmented research streams and offering a broader understanding of inequality in the digital economy. The findings suggest that investments in digital infrastructure and cybersecurity should accompany AI-driven innovation to ensure a more equitable distribution of technological benefits. Effective digital transformation therefore requires coordinated strategies that combine technological advancement, digital inclusion, and cyber resilience.