DP14320 The Demand for AI Skills in the Labor Market

Author(s): Liudmila Alekseeva, José Azar, Mireia Gine, Sampsa Samila, Bledi Taska
Publication Date: January 2020
Keyword(s): artificial intelligence, Machine Learning, technology diffusion, Wage Premium
Programme Areas: Labour Economics

We document a dramatic increase in the demand for AI skills in online job postings over the period 2010-2019. The demand for AI skills is highest in IT occupations, followed by architecture/engineering, life/physical/social sciences, and management. The sectors with the highest demand for AI are information, professional services, and finance. At the firm level, higher demand for AI skills is associated in the cross-section with larger market capitalization, higher cash holdings, and higher investments in R\&D. We also document a large wage premium for job postings that require AI skills, as well as a wage premium for non-AI vacancies posted by firms with a high share of AI vacancies. Interestingly, managerial occupations have the highest wage premium for AI skills.