From AI Literacy to Future Employability: A Serial Mediation Model of Career Adaptability and Digital Self-Efficacy among Generation Z in Developing Countries

Abstract

The accelerating diffusion of Artificial Intelligence across global labor markets has fundamentally reconfigured the competency demands placed on Generation Z, the largest generational cohort in Indonesia at 27.94% of the total population, who are positioned to constitute the primary backbone of the national workforce over the coming two decades. Despite growing scholarly attention to AI literacy, soft skills, career adaptability, and digital self-efficacy as individual predictors of employability, no prior study has integrated these constructs within a unified serial mediation framework that explains the psychological mechanism through which competencies are translated into future employability. study employed an explanatory quantitative design with a cross-sectional survey of 500 Generation Z professionals employed in Indonesia's digital and technology-based industries. Partial Least Squares Structural Equation Modeling (PLS-SEM) was used to test seven hypotheses, including five direct effect pathways and two serial mediation chains, grounded in Career Construction Theory, Human Capital Theory, and Social Cognitive Theory. All seven hypotheses were supported at p < 0.001. AI literacy (β = 0.345) and soft skills (β = 0.326) each significantly predicted career adaptability. Career adaptability exerted the strongest effect in the model on digital self-efficacy (β = 0.685), and both mediators significantly predicted future employability (β = 0.371 and β = 0.349 respectively). Critically, career adaptability and digital self-efficacy serially mediated the relationship between AI literacy and future employability (β = 0.082, t = 5.640) and between soft skills and future employability (β = 0.078, t = 5.375), confirming the proposed serial mediation model. The final outcome model explained 43.6% of variance in future employability (R² = 0.436). This study makes three original contributions. It repositions future employability as a career outcome shaped through chained psychological-cognitive mechanisms rather than direct competency transfer. It introduces the first empirically tested serial mediation model positioning career adaptability and digital self-efficacy as sequential mediators between competency inputs and future employability among Generation Z. It frames AI as a structural context rather than merely a workplace tool, opening new theoretical inquiry into how macro-level technological transformation shapes individual career psychology in developing countries.

Keywords: AI Literacy, Soft Skills, Career Adaptability, Digital Self-Efficacy, Future Employability, Generation Z and Developing Countries