What we’re reading about real time labor market data

Real-time labor market data, such as job postings, are increasingly filling a key knowledge gap, including in developing countries. While its use started in the 2010s, mainly using US data, it has expanded rapidly to a range of countries. Access to up-to-date and granular data on job skills requirements, in-demand occupations, and the changing nature of jobs is critical for labor market stakeholders, from policymakers and employers to jobseekers, students, and all who help connect people with jobs.

With big data techniques, this information is more readily available and can provide insights on labor market dynamics and can be leveraged to inform evidence-based policies. This information is particularly relevant for developing countries, which tend to face some of the greatest labor market challenges, with pervasive market and institutional failures, and where understanding of the local labor market landscape is mostly missing and needed the most.

Job posting data has been used to answer specific questions on a diverse range of labor topics. A series of studies show how labor markets have evolved in skills requirements, type of occupations and tasks. A few researchers also examined how COVID-19 impacted labor markets soon after the outbreak, reinforcing the importance of real-time labor market information sources when many traditional surveys suddenly stopped and mostly lost relevance. Others have used online job posts to uncover labor market dynamics such as explicit gender discrimination, labor market tightness and skill requirements, the impact of geographic location on job search, and use of remote work during COVID-19.

Despite providing an increasing diversity of labor market insights, online job posting data have limitations. For instance, in contrast to traditional labor market information, these data are often biased toward specific sectors, occupations, firm size, skill level, and geographic coverage, particularly in contexts where online postings are not as widespread. Some researchers are overcoming data quality issues and limitations through validation with traditional labor market data.

Even with these challenges, real-time labor market data can support initiatives for more, better, and inclusive jobs. By strengthening labor market monitoring and analysis, these data can inform active labor market programs and workforce development policies to better align skill supply and demand; local economic development strategies; and equal employment opportunities policies and anti-discriminatory programs. Other stakeholders can use the information such as students making more informed decisions about their field of study; job seekers and employers identifying skills demanded in an occupation; and researchers exploiting new datasets to expand the knowledge frontier on labor market challenges.

Real time labor market data

• Nontraditional sources of skills data such as online job advertisements can address a wide range of research questions. (Napierala & Kvetan, Handbook of Computational Social Science for Policy, January 2023)
• Categorizing keywords from job ads into 10 general skills shows a substantial variation in skill requirements, even within narrowly defined occupations. The study also found positive correlations between cognitive and social skills and external pay and firm performance. (Deming & Khan, Journal of Labor Economics,May 2018)
• More than 250 million job vacancy postings across five countries from 2019 to early 2023 demonstrate an enduring shift to remote work, including high variation across cities, industries, and occupations. (Hansen et al., National Bureau of Economic Research Working Paper, March 2023)
• A dataset based on text from job ads in the US from 1950 to 2000 illustrates a larger move away from routine cognitive and manual tasks and toward nonroutine interactive and analytic tasks than prior research found. (Atalay et al., American Economic Journal: Applied Economics, 2020)

Essential readings

• The earnings premium for college graduates majoring in technology-intensive subjects declines rapidly and these graduates transition out of faster-changing occupations as they gain experience. (Deming & Noray, The Quarterly Journal of Economics, November 2020)
• Burning Glass Technologies’ data on online job openings is a valuable source of information about labor market demand. (Cammeraat & Squicciarini, OECD Science, Technology and Industry Working Papers, April 2021)
• Analysis of skills profiles for digital and non-digital occupations in Cambodia, Malaysia, Thailand, and Vietnam show that highly digital occupations require both digital skills and cognitive and socioemotional skills. (Cunningham et al., World Bank, May 2022)
• Job vacancies fell by over 40% by late April 2020 due to the COVID-19 pandemic. (Forsythe et al., National Bureau of Economic Research Working Paper, April 2020)
• This study reveals explicit gender discrimination in a population of ads on a Chinese Internet job board and suggests that firm preferences for particular job-gender matches are overridden in skilled positions. (Kuhn & Shen, The Quarterly Journal of Economics, February 2023)
• In support of Indonesia’s Government in strengthening its labor market information system, this report shows how online vacancy data can produce labor market intelligence. (World Bank, February 2022)

Broader jobs agenda

• ChatGPT substantially raises average productivity and decreases worker inequality in mid-level professional writing tasks, compressing the productivity distribution by benefiting low-ability workers more. (Noy & Zhang, Working Paper, March 2023)
• Evidence from Colombia suggests that a vocational program emphasizing technical relative to social skills generates more significant short-term benefits, but these relative benefits quickly disappear. (Barrera-Osorio, Kugler, & Silliman, The World Bank Economic Review, March 2023)
• A new study found trade-induced changes in Mexican labor demand affected population growth and migration responses at the local level. (Guerrico, The World Bank Economic Review, February 2023)
• Enhancing labor protection intensity in China promoted economic development in regions with higher levels of human capital. (Xu et al., Electronic Commerce Research, September 2022)
• This paper provides tools to counteract a potential drop in economic equality and performance when frontier economies that adopt new general-purpose technologies. (Alexeev, Economics of Transitions and Institutional Change, April 2022)
• Return to labor market experience for immigrants to Sweden does not depend on whether the individual acquired Sweden-specific human capital before or after entering the labor market. (Tibajev, Social Indicators Research, March 2023)
• Firms further up in the value chain pay higher wages but this varies depending on worker origin in developing or developed country. (Fays, Mahy, & Rycx, IZA Discussion Paper, August 2021)
• Self and proxy labor reports from surveys in Ghana illustrates significant differences in estimated labor productivity based on gender and marriage satisfaction. (Dervisevic & Goldstein, Journal of Development Economics, March 2023)

This blog is based on the April 2023 edition of the Knowledge4Jobs newsletter, curated by the World Bank’s Jobs Group and Labor and Skills Global Solutions Group. Click here to sign up for the Knowledge4Jobs newsletter.