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The Rising Return to Noncognitive Skill

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  • Per-Anders Edin
  • Peter Fredriksson
  • Martin Nybom
  • Björn Öckert

Abstract

This paper uses administrative data from Sweden to document trends in the labor market returns to skills. Between 1992 and 2013, the economic return to noncognitive skill⁠—a psychologist-assessed measure of teamwork and leadership skill⁠—roughly doubled. The return to cognitive skill was relatively stable and decreased modestly during the 2000s, however. Among men with similar levels of education, the return to noncognitive skill is higher than the return to cognitive skill. The increasing return to noncognitive skill is driven by changes at the top of the wage distribution and by sorting into higher-paying occupations.

Suggested Citation

  • Per-Anders Edin & Peter Fredriksson & Martin Nybom & Björn Öckert, 2022. "The Rising Return to Noncognitive Skill," American Economic Journal: Applied Economics, American Economic Association, vol. 14(2), pages 78-100, April.
  • Handle: RePEc:aea:aejapp:v:14:y:2022:i:2:p:78-100
    DOI: 10.1257/app.20190199
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    More about this item

    JEL classification:

    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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