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Leadership Skills and Wages

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  • Kuhn, Peter
  • Weinberger, Catherine

Abstract

American business is devoting a growing share of resources to identifying and developing a worker characteristic called ³leadership skill². Is there such a thing, and is it rewarded in labor markets? Using the Project Talent, NLS72 and High School and Beyond datasets, we show that men who occupied leadership positions in high school earn more as adults, even when cognitive skills are held constant. The pure leadership-wage effect varies, depending on definitions and time period, from four percent to twenty-four percent, and appears to have increased over time. High-school leaders are more likely to occupy managerial occupations as adults, and leadership skills command a higher wage premium within managerial occupations than in other jobs. We find evidence that leadership skill has a component that is determined before high school, but also find evidence suggesting that it is ³teachable².

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Paper provided by Department of Economics, UC Santa Barbara in its series University of California at Santa Barbara, Economics Working Paper Series with number qt50q3c9n1.

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Date of creation: 01 Mar 2003
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Handle: RePEc:cdl:ucsbec:qt50q3c9n1

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Keywords: Leadership; skills; wages;

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  1. Eide, Eric R. & Ronan, Nick, 2001. "Is participation in high school athletics an investment or a consumption good?: Evidence from high school and beyond," Economics of Education Review, Elsevier, Elsevier, vol. 20(5), pages 431-442, October.
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  4. David Card & Thomas Lemieux, 2000. "Can Falling Supply Explain the Rising Return to College for Younger Men? A Cohort-Based Analysis," NBER Working Papers 7655, National Bureau of Economic Research, Inc.
  5. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The Skill Content Of Recent Technological Change: An Empirical Exploration," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 118(4), pages 1279-1333, November.
  6. Henry S. Farber & Robert Gibbons, 1994. "Learning and Wage Dynamics," Working Papers, Princeton University, Department of Economics, Industrial Relations Section. 707, Princeton University, Department of Economics, Industrial Relations Section..
  7. Edward P. Lazear & Sherwin Rosen, 1979. "Rank-Order Tournaments as Optimum Labor Contracts," NBER Working Papers 0401, National Bureau of Economic Research, Inc.
  8. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 101(3), pages 410-42, June.
  9. Hamermesh, Daniel S & Biddle, Jeff E, 1994. "Beauty and the Labor Market," American Economic Review, American Economic Association, American Economic Association, vol. 84(5), pages 1174-94, December.
  10. Sherwin Rosen, 1982. "Authority, Control, and the Distribution of Earnings," Bell Journal of Economics, The RAND Corporation, The RAND Corporation, vol. 13(2), pages 311-323, Autumn.
  11. John M. Barron & Bradley T. Ewing & Glen R. Waddell, 2000. "The Effects Of High School Athletic Participation On Education And Labor Market Outcomes," The Review of Economics and Statistics, MIT Press, MIT Press, vol. 82(3), pages 409-421, August.
  12. Goldsmith, Arthur H & Veum, Jonathan R & Darity, William, Jr, 1997. "The Impact of Psychological and Human Capital on Wages," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 35(4), pages 815-29, October.
  13. Jeff Grogger & Eric Eide, 1995. "Changes in College Skills and the Rise in the College Wage Premium," Journal of Human Resources, University of Wisconsin Press, University of Wisconsin Press, vol. 30(2), pages 280-310.
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