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Skills That Pay: Digital Skills Demand and Wage Premia in Asia and the Pacific

Author

Listed:
  • Pawel Adrjan

    (Indeed)

  • Yusuke Aoki

    (Indeed)

  • Gabriele Ciminelli

    (Asian Development Bank)

  • Robin Döttling

    (Erasmus University of Rotterdam)

  • Sílvia Garcia-Mandicó

    (Asian Development Bank)

Abstract

We study the evolution of digital and artificial intelligence (AI) skill demand across six economies in Asia and the Pacific between 2019 and 2024 using millions of online job postings from Indeed and a large language model to classify them by their required level of digital and AI proficiency. Digital skill requirements are widespread across the occupational distribution and have expanded most rapidly in traditionally low and mid digital jobs, pointing to broad technological diffusion. Jobs requiring higher digital proficiency command substantially higher pay, even when comparing job postings within the same job title and controlling for cognitive, interpersonal, organizational, and technical skill requirements. We estimate wage premia of approximately 4%, 11%, and 26% for basic, intermediate, and advanced digital skills, respectively, with intermediate and advanced digital skills commanding larger premia than many other highly rewarded skills. We also document a sharp increase in demand for AI-related competencies, particularly those related to the use of AI tools.

Suggested Citation

  • Pawel Adrjan & Yusuke Aoki & Gabriele Ciminelli & Robin Döttling & Sílvia Garcia-Mandicó, 2026. "Skills That Pay: Digital Skills Demand and Wage Premia in Asia and the Pacific," ADB Economics Working Paper Series 850, Asian Development Bank.
    • Handle: RePEc:ris:adbewp:022642
    as

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    JEL classification:

    • C55 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Large Data Sets: Modeling and Analysis
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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