IDEAS home Printed from https://ideas.repec.org/p/ces/ceswps/_10817.html
   My bibliography  Save this paper

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

Author

Listed:
  • Eugenia Gonzalez Ehlinger
  • Fabian Stephany

Abstract

For emerging professions, such as jobs in the field of Artificial Intelligence (AI) or sustainability (green), labour supply does not meet industry demand. In this scenario of labour shortages, our work aims to understand whether employers have started focusing on individual skills rather than on formal qualifications in their recruiting. By analysing a large time series dataset of around one million online job vacancies between 2019 and 2022 from the UK and drawing on diverse literature on technological change and labour market signalling, we provide evidence that employers have started so-called “skill-based hiring” for AI and green roles, as more flexible hiring practices allow them to increase the available talent pool. In our observation period the demand for AI roles grew twice as much as average labour demand. At the same time, the mention of university education for AI roles declined by 23%, while AI roles advertise five times as many skills as job postings on average. Our analysis also shows that university degrees no longer show an educational premium for AI roles, while for green positions the educational premium persists. In contrast, AI skills have a wage premium of 16%, similar to having a PhD (17%). Our work recommends making use of alternative skill building formats such as apprenticeships, on-the-job training, MOOCs, vocational education and training, micro-certificates, and online bootcamps to use human capital to its full potential and to tackle talent shortages.

Suggested Citation

  • 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.
    • Handle: RePEc:ces:ceswps:_10817
    as

    Download full text from publisher

    File URL: https://www.ifo.de/DocDL/cesifo1_wp10817.pdf
    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. García-Suaza, Andrés & Sarango Iturralde, Alexander & Caiza-Guamán, Pamela & Gil Díaz, Mateo & Acosta Castillo, Dana, 2025. "Unequal Impacts of AI on Colombia's Labor Market: An Analysis of AI Exposure, Wages, and Job Dynamics," Working papers 113, Red Investigadores de Economía.
    2. Marites M. Cuyos, Mbm & John Michael P. Castino, Dm, Lpt, 2025. "Feasibility Study on the Offering of Bachelor of Science in Business Administration Major in Human Resource Management (BSBA-HRM) Program at Cronasia Foundation College, Inc," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(3s), pages 3736-3762, May.

    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. 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.
    2. Xiao, Yao & Xiang, Rong & Sun, Yong-lei & Chen, Jin & Hao, Yun-hong, 2025. "Digital disruption, knowledge and collaborative networks and green innovation in China manufacturing transformation," Technological Forecasting and Social Change, Elsevier, vol. 216(C).
    3. 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.
    4. 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).
    5. repec:osf:osfxxx:fk3r7_v1 is not listed on IDEAS
    6. 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.
    7. 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.
    8. 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.
    9. agarwal, shekhar, 2022. "India’s Rising Technology Economy: Sources and Consequences," OSF Preprints x6yzm, Center for Open Science.
    10. Jhon Pinedo-López & Rubén Baena-Navarro & Nini Durán-Rojas & Lina Díaz-Cogollo & Luis Farak-Flórez, 2024. "Energy Transition in Colombia: An Implementation Proposal for SMEs," Sustainability, MDPI, vol. 16(17), pages 1-17, August.
    11. Meftah Salem M. Alfatni & Siti Khairunniza-Bejo & Mohammad Hamiruce B. Marhaban & Osama M. Ben Saaed & Aouache Mustapha & Abdul Rashid Mohamed Shariff, 2022. "Towards a Real-Time Oil Palm Fruit Maturity System Using Supervised Classifiers Based on Feature Analysis," Agriculture, MDPI, vol. 12(9), pages 1-28, September.
    12. Vasconcelos-Garcia, Madalena & Carrilho-Nunes, Inês, 2024. "Internationalisation and digitalisation as drivers for eco-innovation in the European Union," Structural Change and Economic Dynamics, Elsevier, vol. 70(C), pages 245-256.
    13. 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).
    14. Lin, Boqiang & Huang, Chenchen, 2023. "Nonlinear relationship between digitization and energy efficiency: Evidence from transnational panel data," Energy, Elsevier, vol. 276(C).
    15. Torrent-Sellens, Joan & Enache-Zegheru, Mihaela & Ficapal-Cusí, Pilar, 2025. "Twin transitions or a meeting of strangers? Unravelling the effects of AI and innovations on economic, social and environmental MSMEs sustainability," Technology in Society, Elsevier, vol. 81(C).
    16. Yuan Sun & Yiwei Ren, 2025. "Impact of the Pilot Policy for Migrant Workers’ Return Entrepreneurship on High-Quality Agricultural Development in the Context of Rural Revitalization," Sustainability, MDPI, vol. 17(7), pages 1-19, April.
    17. 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).
    18. 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).
    19. 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.
    20. 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).
    21. 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).

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • C55 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Large Data Sets: Modeling and Analysis
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

    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:ces:ceswps:_10817. 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: Klaus Wohlrabe (email available below). General contact details of provider: https://edirc.repec.org/data/cesifde.html .

    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.