AI in the US Public Sector vs. Private Sector
New Research on how AI Skills and Jobs in Public Sector are behind those in the Private Sector.
Report Summary
The growth of AI has created new jobs across all sectors of the economy. Employers in both the public and private sectors are increasingly assessing how to best leverage these emerging technologies and, in turn, looking for workers with relevant skill sets. This whitepaper, created jointly by Lightcast and Professors Christos Makridis and Gil Alterovitz, studies the differences in demand, wages, and requirements for AI-related jobs in the public sector versus the private sector in order to offer broader guidance on federal hiring for emerging technologies.
Fact is, the U.S. public sector has long faced challenges in attracting and retaining talented technology workers. For this research, Lightcast leveraged its custom definition of artificial intelligence job postings from a long-standing collaboration with the Stanford Institute for Human-Centered Artificial Intelligence, with which Lightcast has partnered in publication of the AI Index Report since 2020. Leaning on expertise in the measurement of AI jobs and data history of the job postings database from 2017 to 2023, three key takeaways emerged from the data related to AI job trends across the public and private sectors.
Key Findings
Job Postings
AI job postings as a proportion of the total grew from 0.5% in 2017 to roughly 2% in 2023 in the private sector, but has remained fairly flat in the public sector at 0.25%.
Salary Discrepancy
Average posted salaries for AI jobs are roughly 50% higher in the private sector, relative to the public sector.
Educational Requirements
The private sector is twice as likely to include any educational requirements for technical AI jobs, whereas the public sector relies more on associates and other standard degree requirements.
Trends in AI Jobs Postings
From 2017 to 2023, the private sector posted about 174 AI jobs for every 1 AI job posted in the public sector. When controlling for the overall sizes of the public and private sectors, artificial intelligence is approximately five times more concentrated in job postings in the private sector than in the public sector.
The study looked at the number of AI jobs as a share of the total in the public and private sectors. We find a much higher concentration of demand for AI jobs, as well as faster growth in demand, in the private sector compared to the public sector. In early 2018, the percent of all private sector job postings that were artificial intelligence postings averaged approximately 0.7% during the 12 months prior, compared to the public sector average of 0.2% during the same period. The share of AI postings in the private sector grew to an average of 1.8% by the middle of 2022, and the public sector’s AI share grew to 0.4% during that same period, indicating that the public sector is about five years behind the private sector in its maturity for AI demand.
Wages
This table below evaluates wage information for the ten most common AI occupations in public sector job postings, beginning with average earnings in the occupation (with non-AI labor included), and advertised salaries in AI and non-AI job postings in the public and private sectors. In half of these occupations, average earnings exceed advertised salaries for AI-specific jobs in the public sector.
Additionally, the private sector advertises significantly higher salaries in all but two of the ten most common public sector AI occupations. The private sector also tends to pay a premium to these occupations when they are AI-based, while this trend is less consistent in the public sector. Private sector employers paying commensurately higher salaries when an occupation requires AI skills may reinforce public sector hiring challenges for skilled AI workers.
Educational Requirements
The required education and experience levels between the public and private sector employers varies dramatically when looking at all artificial intelligence job postings. We found that, whereas public sector postings disproportionally request at least an Associate degree, the private sector requires a level higher degree. That is, many require a Bachelor's at a minimum. We broke the analysis down further between non-technical and technical AI roles; technical roles are those occupations most often associated with STEM (science, technology, engineering and mathematics), while non-technical roles encompass all other occupations.
In non-technical career areas, the distribution of educational requirements in the public sector skews more towards sub-bachelor’s degree requirements, with nearly 30% of all non-technical AI job postings in the public sector requiring less than a bachelor’s degree, compared to only 10% of the time in the private sector. Meanwhile, the private sector requires a bachelor’s degree at a rate that far exceeds the rate of requirement in the public sector, with over 50% of non-technical AI job postings in the private sector requiring a bachelor’s degree compared to only about 30% in the public sector.
We also looked at technical career areas, and find that the distribution of educational requirements changes significantly between the groups. While the private sector has similar educational requirements in technical career areas as in non-technical career areas, the rate at which the public sector does not list educational requirements falls from nearly 30% to about 16%. This is nearly half the rate at which private sector job posters list educational requirements. Additionally, employers posting for technical positions in AI require bachelor’s degrees in over 50% of postings, a rate similar to that of the private sector.
Strict educational requirements in technical career areas of AI could further stifle the public sector’s ability to find labor in key technical occupations. Public sector agencies may consider examining the underlying skills required for key AI occupations to assess degree requirements and remove potentially unnecessary barriers to hiring skilled workers. While certain degrees and credentials may appropriately define certain AI positions, there may also be occupations where public sector employers can consider focusing on skills in lieu of a degree to widen its talent pool.
"Measuring and Understanding Differences in Private and Public Sector Technology Jobs: Evidence from Artificial Intelligence Job Posting Data"
What's Next?
This research reinforces the growing consensus that the federal government has struggled with retaining and attracting top talent, especially in technology-based jobs. While there is little evidence on the underlying sources of the talent gap and how to remedy it, this research shines a light on labor market frictions that shine through in job postings data for AI vacancies in the public sector as compared to the private sector.
Read the Full Report to understand how AI trends are impacting public sector jobs now, and the outlook for the future.