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LLM Meets Job Advertisements: Unmasking Skill Premia in the UK

Author

Listed:
  • Rony, Sidharth

    (RS: GSBE other - not theme-related research, Mt Economic Research Inst on Innov/Techn)

Abstract

Rapid advances in technology and events such as COVID-19 have significantly transformed the modern workplace, potentially altering the skills demanded in jobs. This study examines the evolving demand and posted-wage premia for Information and Communication Technology (ICT), interpersonal, and Artificial Intelligence (AI) skills in the UK labour market. Using a comprehensive dataset of online job advertisements (2016 to 2022), skills are extracted and categorised via GPT-4 zero-shot learning. Cross-sectional log-wage regressions, incorporating occupation and regional fixed effects with three-way Cameron-Gelbach-Miller clustered standard errors, reveal divergent trends in skill compensation. While interpersonal skills are ubiquitously demanded (approximately 90% of listings), they yield no significant posted-wage premium, likely reflecting their near-universal baseline requirement across postings. In contrast, ICT skills, demanded in approximately 55% of postings, carry a posted-wage premium of approximately 7%. AI skills, mentioned in approximately 3% of postings, carry a posted-wage premium of approximately 9% within the ICT-mentioning subsample. These findings document robust associational posted-wage premia for technical competencies amidst recent pandemic-induced and technological labour market shifts.

Suggested Citation

  • Rony, Sidharth, 2026. "LLM Meets Job Advertisements: Unmasking Skill Premia in the UK," MERIT Working Papers 010, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2026010
    DOI: 10.53330/QGGU3545
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    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • C45 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Neural Networks and Related Topics
    • 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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