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
-
Less unequal when social networks lead to jobs
The question of how contacts affect job opportunities has long been a subject of debate. A new study by Marcus Eliason, Lena Hensvik, Francis Kramarz, and Oskar Nordström Skans sheds new light on the issue. The results challenge the perception that social contacts reinforce inequality in the labor market by primarily benefiting high-income individuals who have contacts in other high-paying firms. However, the study finds no evidence to support this notion. Instead, it reveals that contacts are more important for low-wage firms, which hire people from various income levels. Therefore, there are indications that job placements through contacts are actually more equal than traditional, more formal search methods, as such recruitments involve greater movement between income levels.
-
What do companies do when workers go on extended parental leave?
A lot of research investigates how parental leave affects parents' careers, women's and children's health, and how it is divided between the parents. However, less is known about how parental leave programs affect companies, which is an important question since increased parental leave can make it more expensive to hire women and affect companies' profits and competitiveness negatively. In a new study, researchers Arizo Karimi, Rita Ginja, and Pengpeng Xiao investigate how companies reacted after two Swedish parental leave reforms that extended the duration of paid leave.
-
Employers value social skills more than brains
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 -
Stronger neighbourhood ties can reduce crime
The article Bolstering community ties as a mean of reducing crime
is published in the Journal of Economic Behavior and Organization
Authors: Magdalena Domínguez and Daniel Montolio -
Emigration sparked innovation
The article Mass Migration and Technological Change is soon to be published in The Journal of the European Economic Association
Authors: David Andersson, Mounir Karadja and Erik Prawitz -
What role does news media play in the economy?
The paper Sectoral Media Focus and Aggregate Fluctuations is
published in The American Economic Review
Authors: Ryan Chahrour, Kristoffer Nimark and Stefan Pitschner -
Living in larger cities is greener
The paper Green urbanization is published in Plos One
Authors: Jan Eeckhout and Christoph Hedtrich -
Global earnings inequality down, within-country inequality increasing
This article is published in The Economic Journal
Authors: Olle Hammar and Daniel Waldenström -
Student achievement rises when grades matter more for admission
This paper is part of the thesis Inputs and Incentives in Education
Author: Lucas Tilley