Using job vacancy data to understand evolving demand for digital skills

How will the introduction of new technologies affect labour markets and the future of work? Most answers to this critical question rely on official administrative data about workers, occupations and firms. However, these data cannot tell us about how jobs themselves have changed – they can tell us whether the overall demand for certain occupations has risen or not, but not about how these jobs are evolving, including changes in demand for specific forms of technical knowledge. Vacancy data provide a novel perspective. The data are available at a high frequency and include detailed information on skill requirements for each job posted. This allows researchers to conduct real-time analyses of how technical change is affecting labour demand and the demands for different types of skills, both across and within different occupation, industry and regional groups. This commentary explores the potential of a leading vacancy dataset, Lightcast, for addressing key questions about the labour market, focusing on the data available for the US and the UK. Relative to alternative data providers, Lightcast’s data is unique for two reasons: first, the long time horizon the data cover, and second, for the uniquely rich skills taxonomy the data include. Benchmarking Lightcast data against official datasets shows that, in the US, coverage of new vacancies has improved over time, and contains industry, firm and skills information. In the UK, the data is broadly representative of the universe of vacancies, but many observations are missing firm and industry information. In both countries, the data tend to overrepresent vacancies in high-skilled occupations. Nonetheless, Lightcast data offer valuable real-time insight into changes in job markets. For example, our sample analysis shows that between 2012 and 2024, the share of vacancies associated with ICT vacancies has declined across the UK and that the share of vacancies for accounting occupations requiring software skills is higher in the US than in the UK. Local labour markets in both the US and the UK have become less concentrated over time, but vacancies associated with software skills have remained more concentrated at the largest firms. These examples illustrate some of the ways that vacancy data can inform policy makers, researchers and stakeholders interested in the digital transformation of work.