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Social skills and the individual wage growth of less educated workers

Author

Listed:
  • Philippe Aghion

    (Institute for Fiscal Studies)

  • Antonin Bergeaud

    (HEC Paris)

  • Richard Blundell

    (Institute for Fiscal Studies)

  • Rachel Griffith

    (Institute for Fiscal Studies)

Abstract

We use matched employee-employer data from the UK to highlight the importance of social skills, including the ability to work well in a team and communicate effectively with co-workers, as a driver for individual wage growth for workers with few formal educational qualifications. We show that lower educated workers in occupations where social skills are more important experience steeper wage growth with tenure, and also higher early exit rates, than equivalent workers in occupations where social skills are less important. Moreover, the return to tenure in occupations where social skills are important is stronger in firms with a larger share of higher educated workers. We rationalize our findings using a model of wage bargaining with complementarity between the skills and abilities of less educated workers and the firm's other assets.
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Suggested Citation

  • Philippe Aghion & Antonin Bergeaud & Richard Blundell & Rachel Griffith, 2024. "Social skills and the individual wage growth of less educated workers," IFS Working Papers W24/08, Institute for Fiscal Studies.
    • Handle: RePEc:ifs:ifsewp:24/08
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    References listed on IDEAS

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    2. David J. Deming & Mikko I. Silliman, 2024. "Skills and Human Capital in the Labor Market," NBER Working Papers 32908, National Bureau of Economic Research, Inc.
    3. Richard Blundell, 2024. "Beyond tax credits and the minimum wage: the challenge of labour market inequality," Fiscal Studies, John Wiley & Sons, vol. 45(1), pages 25-42, March.

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    More about this item

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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