<![CDATA[The rapid transformation of the labor market in the era of Industry 4.0 and Society 5.0 has highlighted the importance of digital and ethical competencies for vocational students. This study aimed to investigate the influence of Islamic Work Ethics (IWE) and AI Literacy (AIL) on employability, with Self-Efficacy (SEF) and Digital Adaptability (DAD) as mediating variables. Data were collected from 169 vocational students across one study programs at the Faculty of Vocational Studies, Universitas Negeri Yogyakarta (UNY). Respondents were selected using proportional stratified random sampling to ensure representation of each program. The research employed a quantitative approach, with data analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The results show that IWE did not significantly affect employability, either directly or indirectly, while AIL exerted a strong and significant influence on SEF, DAD, and employability. Among the mediators, DAD emerged as the most dominant factor, serving as a partial mediator between AIL and employability. These findings highlight the central role of digital competencies in shaping vocational students’ work readiness, while ethical and psychological factors play only a minor role. The study contributes to employability literature and provides practical implications for vocational curricula, emphasizing the integration of AI Literacy and digital adaptability training to align with industry demands.]]>
