PLOS ONE

RESEARCH ARTICLE

Can digital skill protect against job

displacement risk caused by artificial
intelligence? Empirical evidence from 701
detailed occupations
Ni Chen ID☯, Zhi Li☯, Bo Tang ID*☯

School of Public Policy and Administration, Chongqing University, Chongqing, China

☯ These authors contributed equally to this work.

a1111111111 * hipytea@gmail.com
a1111111111
a1111111111
a1111111111
a1111111111 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 occupa-
OPEN ACCESS tional data from the U.S. Bureau of Labor Statistics through the methods of fixed-effects
Citation: Chen N, Li Z, Tang B (2022) Can digital modeling, heterogeneity analyzing and moderation effect testing. The results highlight three
skill protect against job displacement risk caused
main points that (1) the displacement risk by artificial intelligence has significantly negative
by artificial intelligence? Empirical evidence from
701 detailed occupations. PLoS ONE 17(11): effects on occupational wage and employment, (2) the heterogeneous effects across occu-
e0277280. https://doi.org/10.1371/journal. pational characteristics are significant, and (3) the digital skill exerts a significant moderation
pone.0277280 effect to protect against displacement risk. The core policy implication is suggested to
Editor: Bing Xue, Institute for Advanced emphasize digital skill in education and training across occupations to accommodate job
Sustainability Studies, GERMANY requirements in the future.
Received: July 11, 2022

Accepted: October 25, 2022

Published: November 8, 2022

Peer Review History: PLOS recognizes the 1. Introduction

benefits of transparency in the peer review
process; therefore, we enable the publication of The rapid development of artificial intelligence (AI) has made enormous contributions to
all of the content of peer review and author industrial and economic growth over the past decade. However, anxiety about technological
responses alongside final, published articles. The unemployment, namely being displaced by AI, has spread globally as technological break-
editorial history of this article is available here:
throughs and revolutions occur [1]. Although the potential risks of AI on society include eth-
https://doi.org/10.1371/journal.pone.0277280
ics, security, law and education, AI’s impacts on the labor market have been heatedly debated.
Copyright: © 2022 Chen et al. This is an open The relevant debates spell out an increasing concern over human right to work and engage in
access article distributed under the terms of the
productive employment and whether AI can displace the roles of the workforce on a larger
Creative Commons Attribution License, which
permits unrestricted use, distribution, and
scale. While various occupations have recognized the potential risks of AI, the relevant debates
reproduction in any medium, provided the original consider whether the impact of AI on the labor market will be good or bad. On the one hand,
author and source are credited. the pessimistic voice claims that automation or computerization in the workplace turns into
Data Availability Statement: All relevant data are
job loss, and many employments face displacement risk [2, 3]. For instance, Acemoglu and
within the paper and its Supporting Information Restrepo [4] examined the effects of automation driven by AI on the U.S. labor market and
files. estimated the average reduction of about 0.18% to 0.34% in employments and 0.25% to 0.5%

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PLOS ONE Can digital skill protect against job displacement risk caused by artificial intelligence?

Funding: The authors received no specific funding in wages. On the other hand, the optimists state that AI guarantees the quality of economic
for this work. growth and productivity improvement [5]. Furthermore, more job opportunities will be pro-
Competing interests: The authors have declared duced because employment opportunities are continually created in new occupations, such as
that no competing interests exist. repairers, conductors, managers, financiers, and new industries [6]. Hence, the impact of AI
on the labor market is complex and multi-layered. However, one thing is for sure, the impact
of technological advances on labor markets is often inseparable from skill changes in the labor
force. Katz and Murphy [7] discuss skill-biased technological change (SBTC), revealing that
while labor supply continues to grow, technological progress has significantly affected laborers’
employment and wage premiums. Therefore, this study aims to examine the impacts of AI on
the labor market to demonstrate the relationships among displacement risk, emerging skills
and labor market outcomes to provide empirical evidence for implementing technical and
vocational education.

2. Literature review
According to the SBTC framework, continuous technological advancement is expected to
enlarge industrial demand for highly educated labor and intensify employment inequality [8].
AI advancement causes shocks in occupations, resulting in a reduction in labor demand and
wage fluctuations. Therefore, it is suitable that the SBTC framework offers feasible theoretical
guidance for examining the impacts of AI on risks, skills and outcomes.

2.1. Displacement risk caused by AI

Many approaches, such as task-based, skill-based, and occupation-based methods, help mea-
sure the effects of AI displacement. Autor et al. [9] investigated routine-biased technological
changes (RBTC) and classified the tasks into two dimensions: cognitive vs. mental and routine
vs. non-routine, to estimate displacement risk. Frey and Osborne [3] used a Gaussian process
classifier to predict the probability of computerization of 702 occupations and outlined the
expected impacts on the labor force. It has been reported that 47% of U.S. employment was
automated quickly. Plenty of follow-up research applied the estimated probability of comput-
erization to explore the relationship with labor demands in other sectors. Thereby, the reason
why jobs are prone to automation can be uncovered [10]. However, according to Dauth et al.
[11], the use of robots altered Germany’s employment structure and shrank employment
opportunities in the manufacturing industry, while employment increased in the service
industry.

2.2. Digital skills for occupations

Digital skills resulted from digital literacy, which was considered to appropriately understand
and use various digital sources as the modern occupational skills [12]. Deursen and Van Dijk
[13] proposed various concepts to account for medium-related content-related skills, compris-
ing operational, formal, information, communication, content creation and strategic skills
[14]. In line with such concepts [15], the ability to develop and use information and communi-
cation technologies (ICT) is determined by electronically enabled information and the ability
to synthesize information into practical and relevant knowledge. In the new educational sce-
narios, digital skills play a dominant role to transmit quality knowledge in pedagogical pro-
cesses [16]. Digital skills embody a solution to addressing employment challenges and labor
issues caused by technological advancement [17]. It is common to see that digital skills have
been indispensable as digital technologies utilized to realize innovations nowadays [18]. Digital
technologies are instrumental for daily life and work satisfaction in the digital age, thus the dig-
ital skills are more necessary to everyone than ever. According to practical results, the levels of

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PLOS ONE Can digital skill protect against job displacement risk caused by artificial intelligence?

salaries and wages are strongly correlated with digital proficiency and Internet usage, a consis-
tent effort to increase the digital skills of individuals may be required to achieve a more effec-
tive and flexible labor market [19].

2.3. Effects of AI on labor market

Past research has explored the impact of new digital technologies on occupations outcomes
such as wages and unemployment [20, 21]. Most considered AI the main factor for labor mar-
ket distribution and polarization [22–24]. The wage difference between high-skilled and low-
skilled laborers continues to widen as manifested in the continuous tilt of income distribution
to the group of highly educated and skilled laborers. The second view is that AI is an emerging
technology that promotes labor productivity [25–28]. Simultaneously, there is an ambiguous
view that the impact of AI is not absolute and stable and is constantly changing [29–31].

2.4. Summary
The above literature suggests that the technological changes by AI promote economic produc-
tivity at the macroeconomic level in the long run, while reducing wages and employment at
the individual level in the short run. However, the literature gap shows that less research has
investigated occupational effects of AI, even though occupation requirements are critical issues
to understanding technological progress and social change, deconstructing human capital in
workplaces [32]. Another significant gap in previous research is the lack of attention to digital
skills. Skill about AI technologies are in demand to fill skill gaps for the new requirements in
most occupations. Therefore, to identify the theoretical relationships of these variables as
shown in Fig 1, this study proposes the following hypotheses:
Hypothesis 1. Displacement risk will negatively affect occupational wages.
Hypothesis 2. Displacement risk will negatively affect occupational employment.
Hypothesis 3. Displacement risk and digital skills will have a positive synergistic interaction
effect on occupational wage.
Hypothesis 4. Displacement risk and digital skills will have a positive synergistic interaction
effect on occupational employment.

Fig 1. Theoretical framework and hypotheses.

https://doi.org/10.1371/journal.pone.0277280.g001

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PLOS ONE Can digital skill protect against job displacement risk caused by artificial intelligence?

3. Methods
3.1. Empirical model
Considering the above discussion, the following equation is constructed to estimate how dis-
placement risks caused by AI affect occupational wage and employment.
Y ¼ a1 þ b1 Risk þ d1 Level þ ε

A fixed-effect model is employed to describe how displacement risks affect occupational

wage and employment after controlling the year and occupational category as fixed effects.
Yi;t ¼ a2 þ b2 Riski;t þ d2 Leveli;t þ Categoryi þ Yeart þ εi;t

Furthermore, the interaction term (Risk×Skill) is adopted into the fixed-effect model to esti-
mate the moderation effect of digital skill.
Yi;t ¼ a3 þ b3 Riski;t þ gðRisk � SkillÞi;t þ d3 Leveli;t þ Categoryi þ Yeart þ εi;t

where Y represents the annual wages (Wage) and employment (Employment) of occupations,
both are used as the natural logarithm form in the subsequent estimations.
Risk represents displacement risk indicated by the occupation-specific displacement proba-
bility by AI.
Level represents a comprehensive control variable, including the main occupation charac-
teristics clarified into five levels based on the requirements of education, experience and
training.
Skill represents the digital skill requirement of occupations needed to successfully perform
a job, which is the moderation variable indicated by the types of software used.
Category is the major classification of the Standard Occupational Classification (SOC),
which classifies occupations at four levels of aggregation: major, minor, broad, detailed; Year is
period. Parameters i and t denote the occupation belonging to the specific category and year.
Consolidated.

3.2. Data collection

3.2.1. Stage 1. Collecting the raw data: This study collected data of indicators mentioned
above from several publicly available datasets. First, the labor market outcome data of Wage
and Employment were obtained from the Occupational Employment Statistics (OES) database
on the website of U.S. Bureau of Labor Statistics. Second, the occupational characteristic data
of Level and Category were collected from the Occupational Information Network (O� NET)
database on the website of O� NET On-line. Third, the displacement risk data of Risk was from
the estimated results by Frey and Osborne [3], who implemented the Gaussian process classifi-
cation methodology to estimate the automation probability for 702 detailed occupations. All
the probability results for all detailed occupations are presented in the S1 and S2 Tables and S1
Dataset of the article.
3.2.2. Stage 2. Consolidating the selected datasets: This study consolidated the selected
datasets followed the principle of data availability, those samples with missing critical data
were excluded. The selected datasets were matched according to the O� NET-SOC taxonomy
to form the final dataset which is composed of 4,907 observations referring to 701 detailed
occupations from 2013 to 2019.
3.2.3. Stage 3. Describing the dataset statistics: This study conducted the descriptive statis-
tics of the final dataset. Table 1 summarizes the variable statistics. Overall, all the data used in
this study has been uploaded for sharing as the S1 Dataset of this article.

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PLOS ONE Can digital skill protect against job displacement risk caused by artificial intelligence?

Table 1. Descriptive statistics of the variables.

Sign N Mean SD Min. Max.
Wage ($) 4907 55,233 26,603 18,870 242,740
Employment (person) 4907 159,603 404,467 290 4612,510
Risk (%) 4907 53.609 36.781 0.280 99
Level (No.) 4907 2.944 1.097 1 5
Skill (items) 4907 29.422 42.216 0 404

Note: Level is measured as the ordinal categorical variables (1 for “occupations that need little or no preparation”, 2 for “occupations that require some preparation”, 3
for “occupations that need medium preparation”, 4 for” occupations that need considerable preparation” and 5 for “occupations that need extensive preparation”).

https://doi.org/10.1371/journal.pone.0277280.t001

3.3. Statistical analysis

Various statistical analysis methods were used in this study, depending on the purpose of the
analysis. First, the fixed effects model (FE) was used for the basic regression to directly estimate
the effects of the displacement risk on occupational wage and employment. Second, the hetero-
geneity among occupations was examined by applying the grouped regression method. Finally,
the moderation effects of digital skill were analyzed by employing interactions into regressions.
STATA 16.0 was employed for all the statistical analyses.

4. Results
4.1. Basic regression
The regression results shown in Table 2 demonstrate that displacement risk negatively
impacted occupational wage (−0.0022, p < 0.01) and occupational employment (−0.0055,
p < 0.01) after controlling for occupational level, category and year as fixed effects. The esti-
mated results suggest that a 1% increase in displacement risk was associated with a 0.22%
decrease in occupational wage or a 0.55% decrease in occupational employment. These results
also mean that the higher the displacement risk of occupation, the lower the occupational
wage and employment. Therefore, Hypotheses 1 and 2 are confirmed.

Table 2. Basic regression results.

log of Wage log of Employment
Risk −0.0022��� −0.0055���
(0.0002) (0.0009)
���
Level 0.2082 −0.2099���
(0.0071) (0.0362)
Constant 10.5716��� 12.3569���
(0.0384) (0.1891)
Category YES YES
Year YES YES
Adj. R2 0.6151 0.5333
F 213.4787 536.8086
N 4907 4907

Note
���
p < 0.01
��
p < 0.05, and
�
p < 0.1; the standard error is shown in parentheses under the coefficient.

https://doi.org/10.1371/journal.pone.0277280.t002

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PLOS ONE Can digital skill protect against job displacement risk caused by artificial intelligence?

Table 3. Estimation results in different occupational levels.

log of Wage log of Employment
Occupation Level 1 (N = 217) 0.0020 −0.0028
(0.0018) (0.0107)
Occupation Level 2 (N = 1904) −0.0015��� 0.0015
(0.0004) (0.0023)
Occupation Level 3 (N = 1260) −0.0020��� −0.0058���
(0.0002) (0.0018)
Occupation Level 4 (N = 987) −0.0019��� −0.0033
(0.0003) (0.0021)
Occupation Level 5 (N = 539) −0.0039��� −0.0069
(0.0009) (0.0045)

Note
���
p < 0.01
��
p < 0.05, and
�
p < 0.1; the standard error is shown in parentheses under the coefficient.

https://doi.org/10.1371/journal.pone.0277280.t003

4.2. Heterogeneity analysis

As occupations have hierarchical and differentiated features, the heterogeneity analysis is nec-
essary to determine the effects of displacement risk in the different groups of occupational lev-
els and categories.
First, according to the occupational levels classified in O� NET, the high-level occupations
require more professional knowledge, experience, and skills than low-level occupations. As
shown in Table 3, the influence of displacement risk on occupational wage was significantly
negative in Level 2 (−0.0015, p < 0.01), Level 3 (−0.0020, p < 0.01), Level 4 (−0.0019, p < 0.01)
and Level 5 (−0.0039, p < 0.01), while the influence of displacement risk on occupational
employment was only significant in Level 3 (−0.0058, p < 0.01). The results demonstrate the
heterogeneous effects of displacement risk are mainly on occupational wage, suggesting that
AI has a greater impact on occupational wages in higher occupational level.
Second, according to the major occupational classification in O� NET, there are 22 catego-
ries of occupations classified in this study. The estimation results of occupational categories
with wage and employment both-affected are shown in Table 4. The influence of displacement
risk on occupational wage and employment were significant in the occupations categories
including Arts, Design, Entertainment, Sports, and Media (−0.0027, p < 0.01; −0.0066,
p < 0.1), Business and Financial Operations (−0.0020, p < 0.01; −0.0088, p < 0.05), Computer
and Mathematical (−0.0049, p < 0.01; −0.0213, p < 0.05), Construction and Extraction
(−0.0047, p < 0.01; −0.0156, p < 0.01), Educational Instruction and Library (−0.0033,
p < 0.01; −0.0155, p < 0.05), Food Preparation and Serving Related (−0.0070, p < 0.01; 0.0372,
p < 0.01), Healthcare Practitioners and Technical (−0.0070, p < 0.01; 0.0117, p < 0.01), Instal-
lation, Maintenance, and Repair (−0.0037, p < 0.01; −0.0149, p < 0.01), Life, Physical, and
Social Science (−0.0041, p < 0.01; 0.0048, p < 0.1). The results have revealed heterogeneous
effects of displacement risk on occupational wage and employment in the different occupa-
tional categories. In addition, the full list of estimation results could be seen in S1 Table.

4.3. Moderation effect

Regarding whether digital skills can moderate the negative impacts of displacement risk on
occupational wage and employment, interaction (Risk×Skill) was introduced into the

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PLOS ONE Can digital skill protect against job displacement risk caused by artificial intelligence?

Table 4. Estimation results in different major occupational categories.

Major Occupational Categories log of Wage log of Employment
Arts, Design, Entertainment, Sports, and Media (N = 231) −0.0027��� −0.0066�
(0.0006) (0.0035)
Business and Financial Operations (N = 210) −0.0020��� −0.0088��
(0.0005) (0.0039)
Computer and Mathematical (N = 119) −0.0049��� −0.0213��
(0.0005) (0.0097)
Construction and Extraction (N = 392) −0.0047��� −0.0156���
(0.0006) (0.0059)
Educational Instruction and Library (N = 154) −0.0033��� −0.0155��
(0.0007) (0.0060)
Food Preparation and Serving Related (N = 112) −0.0070��� 0.0372���
(0.0009) (0.0114)
Healthcare Practitioners and Technical (N = 308) −0.0070��� 0.0117���
(0.0008) (0.0043)
Installation, Maintenance, and Repair (N = 350) −0.0037��� −0.0149���
(0.0005) (0.0046)
Life, Physical, and Social Science (N = 294) −0.0041��� 0.0048�
(0.0006) (0.0028)

Note
���
p < 0.01
��
p < 0.05, and
�
p < 0.1; the standard error is shown in parentheses under the coefficient.

https://doi.org/10.1371/journal.pone.0277280.t004

regression model for re-examination. Moreover, considering that digital skills are highly corre-
lated with occupations requiring a science, technology, engineering, and mathematics (STEM)
background or occupations belonging to computers and mathematics, it is necessary to exam-
ine the differences and details by sub-grouping. Table 5 reports all the results.
In general, the estimation results of the full sample in Columns (1) and (6) show that the
interaction of displacement risk and digital skill significantly impacted occupational wage
(0.0002, p < 0.01) and employment (0.0068, p < 0.01), suggesting that digital skill can play a
counteraction role against displacement risk. Thus, digital skills can positively moderate the
negative impacts of displacement risk on occupational wage and employment. Thus, Hypothe-
ses 3 and 4 are confirmed.
Specifically, the results of the non-STEM groups in Column (3) and Column (8) show that
the interactions were significantly positive on occupational wage (0.0002, p < 0.01) and occu-
pational employment (0.0072, p < 0.01). Moreover, the interactions of non-IT groups in Col-
umns (5) and (10) were also significantly positive on occupational wage (0.0003, p < 0.01) and
employment (0.0083, p < 0.01). The moderation effect of digital skills was clear in non-STEM
and non-IT occupations. The implication may be that digital tools and IT technology can sig-
nificantly improve work efficiency in these occupations. Therefore, digital skills have competi-
tive advantages, leading to an increase in occupational wages and employment.

4.4. Robustness tests

Most related studies usually have used the displacement probability estimated by Frey and
Osborne. To make the results more reliable, we decide to test the robustness of the results

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PLOS ONE Can digital skill protect against job displacement risk caused by artificial intelligence?

Table 5. Estimation results of moderation effects.

log of Wage log of Employment
Full STEM Non-STEM IT Non-IT Full STEM Non-STEM IT Non-IT
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
Risk −0.0027��� 0.0005 −0.0026��� −0.0056��� −0.0027��� −0.0193��� −0.0326 −0.0191��� −0.0249� −0.0205���
(0.0002) (0.0022) (0.0002) (0.0014) (0.0002) (0.0014) (0.0201) (0.0015) (0.0139) (0.0013)
Risk×Skill 0.0002��� −0.0008 0.0002��� 0.0013 0.0003��� 0.0068��� 0.0082 0.0072��� −0.0139 0.0083���
(0.0001) (0.0008) (0.0001) (0.0012) (0.0001) (0.0005) (0.0067) (0.0005) (0.0096) (0.0005)
Level 0.2043��� 0.1985��� 0.2046��� 0.0614�� 0.2049��� −0.3213��� −0.5570��� −0.3019��� −1.9324��� −0.2508���
(0.0074) (0.0220) (0.0079) (0.0237) (0.0065) (0.0362) (0.0970) (0.0391) (0.2818) (0.0307)
Constant 10.5855��� 10.8171��� 10.5602��� 11.1836��� 10.2554��� 12.7516��� 14.3074��� 12.6084��� 20.3140��� 11.8623���
(0.0391) (0.1172) (0.0413) (0.1048) (0.0282) (0.1894) (0.5048) (0.2004) (1.2550) (0.1387)
Category YES YES YES YES YES YES YES YES NO NO
Year YES YES YES YES YES YES YES YES YES YES
Adj. R2 0.6155 0.5324 0.5956 0.6662 0.4794 0.5517 0.6382 0.5494 0.7077 0.4877
F 207.5462 47.3272 159.5640 18.7182 387.6681 500.7327 181.6218 460.7728 26.0449 1997.2415
N 4907 469 4438 119 4788 4907 469 4438 119 4788

Note
���
p < 0.01
��
p < 0.05, and
�
p < 0.1; the standard error is shown in parentheses under the coefficient.

https://doi.org/10.1371/journal.pone.0277280.t005

using different measurement of displacement risk. According to Manyika et al. [33] found
some sectors have more automatable activities than others after comparing the automation
potential of 19 selected sectors such as manufacturing, agriculture, real estate, educational ser-
vices and so on. Hence, we take their automation potential as the alternative measurement of
displacement risk. Afterward, we manually selected 3 to 8 representative detailed occupations
for each of 19 sectors through matching the most relative occupation title and job content.
Finally, 66 representative occupations were selected for robustness testing. The alternative dis-
placement risk was presented in Table 6, and the more details could be seen in S2 Table.
The estimation results of robustness tests as shown in Table 7 demonstrate that displace-
ment risk negatively impacted occupational wage (−0.0288, p < 0.01) represented in Column
(1), but not significantly on occupational employment represented in Column (3). The estima-
tion results of the moderation effects in Columns (2) and (4) show that the new interaction of

Table 6. The alternative measurement of displacement risk by sectors.

Sectors Risk_d Sectors Risk_d
Accommodation and food services 0.73 Finance and insurance 0.43
Manufacturing 0.6 Arts, entertainment, and recreation 0.41
Transportation and warehousing 0.6 Real estate 0.4
Agriculture 0.57 Administrative 0.39
Retail trade 0.53 Health care and social assistances 0.36
Mining 0.51 Information 0.36
Other services 0.49 Professionals 0.35
Construction 0.47 Management 0.35
Utilities 0.44 Educational services 0.27
Wholesale trade 0.44
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PLOS ONE Can digital skill protect against job displacement risk caused by artificial intelligence?

Table 7. Estimation results of robustness tests.

Log of Wage log of Employment
(1) (2) (3) (4)
Risk −0.0288��� −0.0297��� −0.0077 −0.0089
(0.0014) (0.0014) (0.0056) (0.0059)
���
Risk×Skill 0.0013 0.0015
(0.0005) (0.0019)
Controls YES YES YES YES
Adj. R2 0.4640 0.4713 0.6347 0.6344
F 73.8832 71.2225 728.8624 670.9145
N 462 462 462 462

Note
���
p < 0.01
��
p < 0.05, and
�
p < 0.1; the standard error is shown in parentheses under the coefficient.

https://doi.org/10.1371/journal.pone.0277280.t007

displacement risk and digital skill significantly impacted occupational wage (0.0013, p < 0.01),
but not significantly on occupational employment. Thus, after replacing the measurement of
displacement risk, only the significant impact on occupational wage remains unchanged, the
impacts on occupational employment are not robust.
The above results are possible to be explained in two ways. On the one hand, it is demon-
strated that the phenomenon of wage losses for displaced workers caused by technological
progress and wage premiums arose from emerging skills has already happened among many
sectors [34]. On the other hand, it may be the reason U-shaped employment distribution is
known as job polarization [23], which makes the effect of AI’s displacement risk on occupa-
tional employment failing to show significance in the linear regression.

5. Discussions
This study presents empirical evidence from the United States over 2013–2019 to examine the
occupational effects of AI. (1) The first finding shows that both occupational wages and
employment have been negatively impacted by the displacement risk of AI, which reveals that
occupations with higher displacement risk have a reduction in wages and employment. There
are similar conclusions in the previous literature. Autor et al. [35] found that labor income in
the United States declined in the 1980s and reported that the emergence of automation reduces
labor income in industrialized countries. (2) The second finding illustrates that heterogeneous
effects have been confirmed across occupational levels and categories. It was shown that the
impacts of AI on occupational wages depended on workforce type [36]. Autor and Salomons
[37] proposed that the employment polarization rendered by AI demands more low-skilled
jobs, which means that AI negatively impacts high-skilled and intensive skilled laborers’
wages. (3) The last finding identified the positive moderation effects of digital skills. The role
of ICT or digital skills in the present digital economy should not be underestimated [38]. Digi-
tal skills could drive organizations’ competitiveness and innovation capacity, which are more
required to the current economic and social developments in the 21st-century [39]. AI has
changed the essence of work, making digital skills a fundamental requirement of the modern
labor force [40]. Thus, most occupations try to attract employees with digital skills to adapt to
the increasingly digital environment. For example, the professionals in the healthcare sector
with higher digital skills can provide better quality of patient treatment and more cost-

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effectiveness of work due to their more efficiency on information and technology [41]. Addi-
tionally, digital skills appear to improve the individual’s labor market opportunities, while
14.5% of workers with higher digital skills are changing jobs more often than 10.3% of those
with fewer digital competences, according to the data in the occupation category of “hospital-
ity, retail and other services managers” which is one of occupations at high risk of being auto-
mated [42].
Given the above findings, several policies are recommended. First, basic income supports
could be established for perceivable unemployment by AI. The application of AI is bound to
affect labor markets, and thus social security must concern the weak low-skilled labor as well
as building the strong bottom line for whole labor force. Basic income support could provide a
comprehensive social safety net against the risk of AI shock. Second, active labor market poli-
cies (ALMPs) by Calmfors [43] are another set of policy tools for countervailing the undesir-
able effect of AI displacement and reducing inequality and negative externalities. Bonoli [44]
suggests that ALMPs increase the employment probability for low-skilled workers with basic
education or vocational training and improve labor supply quality. In particular, the emer-
gence of online platform data for ALMPs in recent years, which plays a critical role in closing
the digital skill gaps such as skill training, job searching and so on [45]. According to the inves-
tigation, it is revealed that 76% of OECD and EU countries developing online training and
70% introducing new online courses for designing ALMPs for the recovery [46]. Meanwhile,
online freelancing has increasingly become one important strategy of ALMPs for employment
promotion, one-third of workers stem from India and 42% of all work stems from software
development and tech work according to Online Labour Index 2020 [47]. Finally, filling the
digital skills gap in the digital transformation plays an integral part in adapting occupational
displacement trends. It is necessary to strengthen digital skills training at multiple levels of
basic, professional and vocational education and to accelerate skill transformation to the new
era of AI.
The study is subject to some limitations. Unobserved effects perhaps exist in this study due
to the limited data of specific individuals. This study only analyzes the effect of displacement
risk on wages and employment from the occupational perspective and ignores worker hetero-
geneity. Therefore, the results can overestimate the occupational impacts of displacement risk.
Furthermore, the impacts of AI on occupations are multifaceted. Thus, another study limita-
tion is in only discussing occupational wage and employment, while other important conse-
quences could be deeply concerning in the future.

6. Conclusions
In summary, the increasingly widespread AI applications in the future will significantly impact
occupations and working patterns, and digital skills will be the bridge for human labor and AI
to work together. More importantly, the displacement by AI is not a purely technical subject.
It is necessary to strengthen social and ethical discussions surrounding AI.

Supporting information
S1 Table. The full list of estimation results.
(DOCX)
S2 Table. The full list of alternative measurements.
(DOCX)
S1 Dataset. The whole dataset for this study.
(XLS)

PLOS ONE | https://doi.org/10.1371/journal.pone.0277280 November 8, 2022 10 / 13

PLOS ONE Can digital skill protect against job displacement risk caused by artificial intelligence?

Author Contributions
Conceptualization: Ni Chen, Zhi Li.
Data curation: Bo Tang.
Formal analysis: Bo Tang.
Funding acquisition: Zhi Li.
Investigation: Ni Chen.
Methodology: Bo Tang.
Project administration: Bo Tang.
Resources: Bo Tang.
Software: Bo Tang.
Supervision: Zhi Li.
Validation: Ni Chen, Zhi Li, Bo Tang.
Visualization: Bo Tang.
Writing – original draft: Ni Chen.
Writing – review & editing: Zhi Li.

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