Are artificial intelligence skills a reward or a gamble? Deconstructing the AI wage premium in Europe

Konstantinos Pouliakas, Giulia Santangelo () and Paul Dupire ()
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Giulia Santangelo: European Centre for the Development of Vocational Training (Cedefop)
Paul Dupire: European Centre for the Development of Vocational Training (Cedefop)

Eurasian Business Review, 2025, vol. 15, issue 4, No 5, 1128 pages

Abstract: Abstract Understanding the labour market impact of new, autonomous digital technologies, particularly generative or other forms of artificial intelligence (AI), is currently at the top of the research and policy agenda. Many initial studies, though not all, have shown that there is a wage premium to mostly technical AI skills in labour markets. Such evidence tends to draw on data from web-based sources and typically fails to provide insight into the mechanisms underlying the AI wage gap. This paper utilises representative adult workforce data from 29 European countries, the second European skills and jobs survey, to examine wage differentials of the AI programmer workforce. The latter is uniquely identified as part of the workforce that writes computer programs using AI algorithms. The analysis shows that, on average, AI programmers enjoy a significant wage premium relative to a comparably educated or skilled workforce, such as programmers who do not yet write code using AI at work. Wage decomposition analysis further illustrates that there is a large unexplained component of such wage differential. Part of AI programmers’ larger wage variability can however be attributed to higher job-skill requirements, a propensity for remote work and a greater performance-based component in wage schedules. This indicates differences in the job design and performance management of the AI workforce.

Keywords: Artificial intelligence; Skills; Wage differentials; Performance-based pay (search for similar items in EconPapers)
Date: 2025
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Working Paper: Are Artificial Intelligence (AI) Skills a Reward or a Gamble? Deconstructing the AI Wage Premium in Europe (2025)
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DOI: 10.1007/s40821-025-00302-0

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