AI’s Ripple Effect on Skills and Labour Markets: Evidence from Two Years with the SkillScale Project

This podcast features an interview with Dr. Fabian Stephany about his SkillScale Project, which investigates how rapidly changing technologies like AI are transforming the skills employers seek. The interview begins with a discussion of the current labor market, highlighting high vacancy rates despite skill gaps, and then delves into three research papers examining skill-based hiring in AI and green sectors. Dr. Stephany presents findings showing a shift towards skill-based hiring, with a decreased emphasis on formal degrees and an increased focus on skills, particularly in high-demand areas. He also discusses the increasing prevalence of non-monetary perks (remote work, parental leave) offered to attract talent in AI roles. Finally, the discussion touches upon the complementary and substitution effects of AI on various skills, concluding that the complementary effect is significantly larger.