Fabian Stephany

Matthew Bone, Eugenia Ehlinger, Fabian Stephany

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.

Elina Mäkelä, Fabian Stephany

This paper examines whether artificial intelligence (AI) acts as a substitute or complement to human labour, drawing on 12 million online job vacancies from the United States spanning 2018-2023. We adopt a two-pronged approach: first, analysing "internal effects" within roles explicitly requiring AI, and second, investigating "external effects" that arise when industries, occupations, and regions experience increases in AI demand. Our focus centres on whether complementary skills-such as digital literacy, teamwork, resilience, agility, or analytical thinking-become more prevalent and valuable as AI adoption grows. Results show that AI-focused roles are nearly twice as likely to require skills like resilience, agility, or analytical thinking compared to non-AI roles. Furthermore, these skills command a significant wage premium; data scientists, for instance, are offered 5-10% higher salaries if they also possess resilience or ethics capabilities. We observe positive spillover effects: a doubling of AI-specific demand across industries correlates with a 5% increase in demand for complementary skills, even outside AI-related roles. Conversely, tasks vulnerable to AI substitution, such as basic data skills or translation, exhibit modest declines in demand. However, the external effect is clearly net positive: Complementary effects are up to 1.7x larger than substitution effects. These results are consistent across economies, including the United Kingdom and Australia. Our findings highlight the necessity of reskilling workers in areas where human expertise remains increasingly valuable and ensuring workers can effectively complement and leverage emerging AI technologies.

Fabian Stephany, Jedrzej Duszynski

Generative artificial intelligence (GenAI) is diffusing rapidly, yet its adoption is strikingly unequal. Using nationally representative UK survey data from 2023 to 2024, we show that women adopt GenAI substantially less often than men because they perceive its societal risks differently. We construct a composite index capturing concerns about mental health, privacy, climate impact, and labor market disruption. This index explains between 9 and 18 percent of the variation in GenAI adoption and ranks among the strongest predictors for women across all age groups, surpassing digital literacy and education for young women. Intersectional analyses show that the largest disparities arise among younger, digitally fluent individuals with high societal risk concerns, where gender gaps in personal use exceed 45 percentage points. Using a synthetic twin panel design, we show that increased optimism about AI's societal impact raises GenAI use among young women from 13 percent to 33 percent, substantially narrowing the gender divide. These findings indicate that gendered perceptions of AI's social and ethical consequences, rather than access or capability, are the primary drivers of unequal GenAI adoption, with implications for productivity, skill formation, and economic inequality in an AI enabled economy.

Johann Laux, Fabian Stephany, Alice Liefgreen

The global surge in AI applications is transforming industries, leading to displacement and complementation of existing jobs, while also giving rise to new employment opportunities. Data annotation, encompassing the labelling of images or annotating of texts by human workers, crucially influences the quality of a dataset directly influences the quality of AI models trained on it. This paper delves into the economics of data annotation, with a specific focus on the impact of task instruction design (that is, the choice between rules and standards as theorised in law and economics) and monetary incentives on data quality and costs. An experimental study involving 307 data annotators examines six groups with varying task instructions (norms) and monetary incentives. Results reveal that annotators provided with clear rules exhibit higher accuracy rates, outperforming those with vague standards by 14%. Similarly, annotators receiving an additional monetary incentive perform significantly better, with the highest accuracy rate recorded in the group working with both clear rules and incentives (87.5% accuracy). In addition, our results show that rules are perceived as being more helpful by annotators than standards and reduce annotators' difficulty in annotating images. These empirical findings underscore the double benefit of rule-based instructions on both data quality and worker wellbeing. Our research design allows us to reveal that, in our study, rules are more cost-efficient in increasing accuracy than monetary incentives. The paper contributes experimental insights to discussions on the economical, ethical, and legal considerations of AI technologies. Addressing policymakers and practitioners, we emphasise the need for a balanced approach in optimising data annotation processes for efficient and ethical AI development and usage.

Fabian Stephany, Ole Teutloff, Angelo Leone

The growing adoption of artificial intelligence (AI) technologies has heightened interest in the labour market value of AI-related skills, yet causal evidence on their role in hiring decisions remains scarce. This study examines whether AI skills serve as a positive hiring signal and whether they can offset conventional disadvantages such as older age or lower formal education. We conduct an experimental survey with 1,700 recruiters from the United Kingdom and the United States. Using a paired conjoint design, recruiters evaluated hypothetical candidates represented by synthetically designed resumes. Across three occupations - graphic designer, office assistant, and software engineer - AI skills significantly increase interview invitation probabilities by approximately 8 to 15 percentage points. AI skills also partially or fully offset disadvantages related to age and lower education, with effects strongest for office assistants, where formal AI certification plays an additional compensatory role. Effects are weaker for graphic designers, consistent with more skeptical recruiter attitudes toward AI in creative work. Finally, recruiters' own background and AI usage significantly moderate these effects. Overall, the findings demonstrate that AI skills function as a powerful hiring signal and can mitigate traditional labour market disadvantages, with implications for workers' skill acquisition strategies and firms' recruitment practices.

Otto Kässi, Vili Lehdonvirta, Fabian Stephany

An unknown number of people around the world are earning income by working through online labour platforms such as Upwork and Amazon Mechanical Turk. We combine data collected from various sources to build a data-driven assessment of the number of such online workers (also known as online freelancers) globally. Our headline estimate is that there are 163 million freelancer profiles registered on online labour platforms globally. Approximately 19 million of them have obtained work through the platform at least once, and 5 million have completed at least 10 projects or earned at least $1000. These numbers suggest a substantial growth from 2015 in registered worker accounts, but much less growth in amount of work completed by workers. Our results indicate that online freelancing represents a non-trivial segment of labour today, but one that is spread thinly across countries and sectors.