How Are Technologies Changing the Requirements for Skills and Education? (A Discussion Review)

The paper explores the changing demand for skills and qualifications under the influence of technological progress and the implementation of artificial intelligence. The research issue is examined in three dimensions: the structure of skills in the labor market, the returns to education, and the demand for specific skills and competences. A systematic analysis of 125 key publications in labor economics and skills research from leading think tanks and academic journals between 2018 and 2023 was conducted to identify the effects that technology has on the labor market and to map the changing structure of skills. The presented analyses of the latest empirical studies allow us to draw conclusions about the significant impact of technological progress on the transformation of the structure of skills and qualifications. First, the rapid wave of AI-based automation is setting a fundamentally new frontier of technological capability and productivity, above which the skills premium is rising. The demand for education is growing at the highest levels of higher education, which is mutually reinforced by the processes of tertiary education massivisation and credential inflation. Secondly, the wage premium for the highest level of education and qualifications is predicted to grow, the labor of the holders of which will turn out to be supplemented by new technologies rather than substituted. Third, the distinctive feature of the impact of artificial intelligence technologies from the effects of automation of the previous wave is that artificial intelligence affects more highly skilled jobs rather than medium- and low-skilled jobs, and moves formerly non-routine skills into the category of routine skills, automating tasks previously considered creative. Fourth, key trends in skill demand include increasing demand for socioemotional (non-cognitive) skills, which are least susceptible to automation, as well as high-order non-routine cognitive skills complementary to technological progress. At the same time, the increasing complexity of the content of occupations and labor tasks is accompanied by the emergence of skills deficits and their even more rapid obsolescence.