Employers value social skills more than brains
2022-10-07
The paper The Rising return to Noncognitive skills is published in American
Economic Journal: Applied Economics 2022
Authors: Per-Anders Edin, Peter Fredriksson, Martin Nybom and Björn Öckert
- Social skills are increasingly valued by employers.
- Men who are persistent, enterprising, responsible and tolerant to stress are getting paid more and more.
- In the private sector, the wage return to social skills doubled during the period 1992–2013.
- The wage increase has been greatest for people with very good social skills.
increased between 1992 and 2013. The return increased by
7 percentage points during this time. During the same time
period, the wage return for cognitive skills increased by
just below 2 percentage points.
The researchers have studied the wage development for men aged 38–42 during 1992–2013 in relation to the social and cognitive ability measured at the enlistment.
The study shows that the wage return was particularly high in the private sector and in occupations that require leadership, coordination and creativity. It has also become more common for men with good social skills to work in such professions.
Wages for men with social skills have increased throughout the period, particularly in occupations with large IT investments and a high risk of outsourcing.
The return to cognitive ability increased slightly during the 1990s; however, the demand seems to have declined since the early 2000s.
The reduced relative demand for cognitive abilities might be due to technological development and the outsourcing of production to other countries which seem to have replaced the need for cognitive skills, while it is more difficult to replace tasks that require social ability.
The study provides increased knowledge of how employers’ valuation of different characteristics in the labor market has changed over time.
For more information about the study, contact Per-Anders Edin: per.anders.edin@nek.uu.se
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