Abstract
Our study investigates the heterogeneity of skill demands within occupations, the firm activities that are associated with demand for broader skill sets, and the firm characteristics that are related to particular skills and different combinations of skills. We use a unique matched database of firm-level data and online job vacancy data for a developing economy, namely, India. Employing a multi-level machine learning technique and an innovative skill taxonomy, we identify and categorize skill requirements of firms. Our empirical analysis provides robust evidence of significant heterogeneity in skill requirements across firms within the same occupations. Additionally, we show that firms demanding diverse skills differ from their counterparts. Firms that are competitive in international markets, as well as those that are more innovative, require digital skills and specific combinations of digital and other skills. Our findings highlight the crucial role played by firms in defining the changing nature of work.