IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2312.11942.html
   My bibliography  Save this paper

Skills or Degree? The Rise of Skill-Based Hiring for AI and Green Jobs

Author

Listed:
  • Matthew Bone
  • Eugenia Ehlinger
  • Fabian Stephany

Abstract

Emerging professions in fields like Artificial Intelligence (AI) and sustainability (green jobs) are experiencing labour shortages as industry demand outpaces labour supply. In this context, our study aims to understand whether employers have begun focusing more on individual skills rather than formal qualifications in their recruitment processes. We analysed a large time-series dataset of approximately eleven million online job vacancies in the UK from 2018 to mid-2024, drawing on diverse literature on technological change and labour market signalling. Our findings provide evidence that employers have initiated "skill-based hiring" for AI roles, adopting more flexible hiring practices to expand the available talent pool. From 2018-2023, demand for AI roles grew by 21% as a proportion of all postings (and accelerated into 2024). Simultaneously, mentions of university education requirements for AI roles declined by 15%. Our regression analysis shows that university degrees have a significantly lower wage premium for both AI and green roles. In contrast, AI skills command a wage premium of 23%, exceeding the value of degrees up until the PhD-level (33%). In occupations with high demand for AI skills, the premium for skills is high, and the reward for degrees is relatively low. We recommend leveraging alternative skill-building formats such as apprenticeships, on-the-job training, MOOCs, vocational education and training, micro-certificates, and online bootcamps to fully utilise human capital and address talent shortages.

Suggested Citation

  • Matthew Bone & Eugenia Ehlinger & Fabian Stephany, 2023. "Skills or Degree? The Rise of Skill-Based Hiring for AI and Green Jobs," Papers 2312.11942, arXiv.org, revised Nov 2024.
  • Handle: RePEc:arx:papers:2312.11942
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2312.11942
    File Function: Latest version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Leal Filho, Walter & Wall, Tony & Rui Mucova, Serafino Afonso & Nagy, Gustavo J. & Balogun, Abdul-Lateef & Luetz, Johannes M. & Ng, Artie W. & Kovaleva, Marina & Safiul Azam, Fardous Mohammad & Alves,, 2022. "Deploying artificial intelligence for climate change adaptation," Technological Forecasting and Social Change, Elsevier, vol. 180(C).
    2. Roger Fouquet & Ralph Hippe, 2022. "Twin Transitions of Decarbonisation and Digitalisation: A Historical Perspective on Energy and Information in European Economies," Working Papers 08-22, Association Française de Cliométrie (AFC).
    3. Julie Lassébie & Glenda Quintini, 2022. "What skills and abilities can automation technologies replicate and what does it mean for workers?: New evidence," OECD Social, Employment and Migration Working Papers 282, OECD Publishing.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Karina Tessar & Pawel Cichecki & Ooko James Opiyo, 2025. "Perception, Motivation, and Career Alignment: A Study on Trainees’ Attitudes Toward Vocational Training Centers in Tana River County, Kenya," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 1072-1084.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Eugenia Gonzalez Ehlinger & Fabian Stephany, 2023. "Skills or Degree? The Rise of Skill-Based Hiring for AI and Green Jobs," CESifo Working Paper Series 10817, CESifo.
    2. Keyan Zheng & Fagang Hu & Yaliu Yang, 2023. "Data-Driven Evaluation and Recommendations for Regional Synergy Innovation Capability," Sustainability, MDPI, vol. 15(14), pages 1-21, July.
    3. De Pascale, Gianluigi & Pronti, Andrea & Zoboli, Roberto, 2024. "The role of local institutional quality for the digital and environmental transitions in Italy," Structural Change and Economic Dynamics, Elsevier, vol. 71(C), pages 689-705.
    4. agarwal, shekhar, 2022. "India’s Rising Technology Economy: Sources and Consequences," OSF Preprints x6yzm, Center for Open Science.
    5. Gubareva, Mariya & Shafiullah, Muhammad & Teplova, Tamara, 2025. "Cross-quantile risk assessment: The interplay of crude oil, artificial intelligence, clean tech, and other markets," Energy Economics, Elsevier, vol. 141(C).
    6. Carè, R. & Weber, O., 2023. "How much finance is in climate finance? A bibliometric review, critiques, and future research directions," Research in International Business and Finance, Elsevier, vol. 64(C).
    7. Nelli, Linnea & Virgillito, Maria Enrica & Vivarelli, Marco, 2025. "A Twin Transition or a Policy Flagship? Emergent Constellations and Dominant Blocks in Green and Digital Technologies," IZA Discussion Papers 17779, Institute of Labor Economics (IZA).
    8. Yaliu Yang & Yuan Wang & Yingyan Zhang & Conghu Liu, 2022. "Data-Driven Coupling Coordination Development of Regional Innovation EROB Composite System: An Integrated Model Perspective," Mathematics, MDPI, vol. 10(13), pages 1-25, June.
    9. Karim, Sitara & Husain, Afzol & Lim, Weng Marc & Chan, Ling-Foon & Tehseen, Shehnaz, 2024. "AI, FinTech and clean minerals: A wavelet analysis and quantile value-at-risk investigation," Resources Policy, Elsevier, vol. 99(C).
    10. Luo, Jiahui & Dong, Jingrong & Tan, Zhixiong & Zhang, Haitao & Zhang, Wenqing, 2024. "Relatedness, digital economy and renewable energy product evolution—based on product space perspective," Energy Policy, Elsevier, vol. 186(C).
    11. MUÑOZ DE BUSTILLO LLORENTE Rafael, 2024. "A Critical Review of the Digital and Green Twin Transitions. Implications, synergies and trade-offs," JRC Working Papers on Labour, Education and Technology 2024-07, Joint Research Centre.
    12. Egana-delSol, Pablo & Bravo-Ortega, Claudio, 2025. "Artificial Intelligence and Labor Market Transformations in Latin America," IZA Discussion Papers 17746, Institute of Labor Economics (IZA).
    13. CARBONELL Juan Sebastian, 2024. "In search of the twin transition: the limited performativity of the « green and digital » transitions in the European automotive industry," JRC Working Papers on Labour, Education and Technology 2024-05, Joint Research Centre.
    14. Silva, Victo J. & Chiarini, Tulio & Ribeiro, Leonardo Costa, 2022. "The Brazilian digital platform economy: a first approach," SocArXiv d478v, Center for Open Science.
    15. Subhra Mondal & Subhankar Das & Vasiliki G. Vrana, 2024. "Exploring the Role of Artificial Intelligence in Achieving a Net Zero Carbon Economy in Emerging Economies: A Combination of PLS-SEM and fsQCA Approaches to Digital Inclusion and Climate Resilience," Sustainability, MDPI, vol. 16(23), pages 1-35, November.
    16. repec:osf:socarx:d478v_v1 is not listed on IDEAS
    17. Sun, Yunpeng & Jia, Ruoya & Razzaq, Asif & Bao, Qun, 2024. "Social network platforms and climate change in China: Evidence from TikTok," Technological Forecasting and Social Change, Elsevier, vol. 200(C).
    18. Saul Beltozar-Clemente & Orlando Iparraguirre-Villanueva & Félix Pucuhuayla-Revatta & Fernando Sierra-Liñan & Joselyn Zapata-Paulini & Michael Cabanillas-Carbonell, 2023. "Contributions of the 5G Network with Respect to Decent Work and Economic Growth (Sustainable Development Goal 8): A Systematic Review of the Literature," Sustainability, MDPI, vol. 15(22), pages 1-37, November.
    19. Lee, Chien-Chiang & Yan, Jingyang & Wang, Fuhao, 2024. "Impact of population aging on food security in the context of artificial intelligence: Evidence from China," Technological Forecasting and Social Change, Elsevier, vol. 199(C).
    20. repec:osf:osfxxx:fk3r7_v1 is not listed on IDEAS
    21. Ralph Hippe & Damien Demailly & Claude Diebolt, 2022. "The Digital Transition for a Sustainable Mobility Regime? A Long-Run Perspective," Working Papers of BETA 2022-19, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    22. Fabiola Eto & Miriam Samuel & Rafael Henkin & Meera Mahesh & Tahania Ahmad & Alisha Angdembe & R Hamish McAllister-Williams & Paolo Missier & Nick J. Reynolds & Michael R. Barnes & Sally Hull & Sarah , 2023. "Ethnic differences in early onset multimorbidity and associations with health service use, long-term prescribing, years of life lost, and mortality: A cross-sectional study using clustering in the UK ," PLOS Medicine, Public Library of Science, vol. 20(10), pages 1-23, October.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:2312.11942. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.