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Digital skill adoption and employment dynamics: Evidence from matched vacancy-employer–employee data

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  • Jensen, Mathias Fjællegaard
  • Schneider, Cédric

Abstract

This paper examines the interplay between firms’ investments in digital skills and employment dynamics within the Danish labor market. We employ novel digital skill demand measures derived from online job postings using natural language processing techniques. We document a strong positive correlation between demand for digital skills, particularly in data science and AI, and firm productivity. Using dynamic lead–lag models, we estimate a positive relationship between digital skill investments and firm-level employment. This positive association is broad-based across demographic groups, and is stronger in certain occupations when specifically considering data science and AI skills. While digitalization drives job creation and productivity gains overall, the workforce impacts of specific technologies are heterogeneous. Our results suggest that digitalization, and particularly data science and AI adoption, may amplify existing labor market disparities across occupations, industries, and regions.

Suggested Citation

  • Jensen, Mathias Fjællegaard & Schneider, Cédric, 2026. "Digital skill adoption and employment dynamics: Evidence from matched vacancy-employer–employee data," Research Policy, Elsevier, vol. 55(5).
    • Handle: RePEc:eee:respol:v:55:y:2026:i:5:s0048733326000673
    DOI: 10.1016/j.respol.2026.105476
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    Keywords

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    JEL classification:

    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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