Can digital skill protect against job displacement risk caused by artificial intelligence? Empirical evidence from 701 detailed occupations

Abstract

To identify the role of digital skill in the skill-biased technological changes caused by artificial intelligence, this study estimates the impacts of displacement risk on occupational wage and employment and examines the moderation effects of digital skill through the occupational data from the U.S. Bureau of Labor Statistics through the methods of fixed-effects modeling, heterogeneity analyzing and moderation effect testing. The results highlight three main points that (1) the displacement risk by artificial intelligence has significantly negative effects on occupational wage and employment, (2) the heterogeneous effects across occupational characteristics are significant, and (3) the digital skill exerts a significant moderation effect to protect against displacement risk. The core policy implication is suggested to emphasize digital skill in education and training across occupations to accommodate job requirements in the future.