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The Rising Return to Non-Cognitive Skill

Author

Listed:
  • Edin, Per-Anders

    () (IFAU)

  • Fredriksson, Peter

    () (Stockholm University)

  • Nybom, Martin

    () (SOFI, Stockholm University)

  • Öckert, Björn

    () (IFAU)

Abstract

We examine the changes in the relative rewards to cognitive and non-cognitive skill during the time period 1992–2013. Using unique administrative data for Sweden, we document a secular increase in the returns to non-cognitive skill, which is particularly pronounced in the private sector and at the upper-end of the wage distribution. Workers with an abundance of non-cognitive skill were increasingly sorted into occupations that were intensive in: cognitive skill; as well as abstract, non-routine, social, non-automatable and offshorable tasks. Such occupations were also the types of occupations which saw greater increases in the relative return to non-cognitive skill. Moreover, we show that greater emphasis is placed on noncognitive skills in the promotion to leadership positions over time. These pieces of evidence are consistent with a framework where non-cognitive, inter-personal, skills are increasingly required to coordinate production within and across workplaces.

Suggested Citation

  • Edin, Per-Anders & Fredriksson, Peter & Nybom, Martin & Öckert, Björn, 2017. "The Rising Return to Non-Cognitive Skill," IZA Discussion Papers 10914, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp10914
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    File URL: http://ftp.iza.org/dp10914.pdf
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    References listed on IDEAS

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    1. repec:ucp:jlabec:doi:10.1086/692475 is not listed on IDEAS
    2. Acemoglu, Daron & Autor, David, 2011. "Skills, Tasks and Technologies: Implications for Employment and Earnings," Handbook of Labor Economics, Elsevier.
    3. repec:oup:qjecon:v:132:y:2017:i:4:p:1593-1640. is not listed on IDEAS
    4. Martin Nybom, 2017. "The Distribution of Lifetime Earnings Returns to College," Journal of Labor Economics, University of Chicago Press, vol. 35(4), pages 903-952.
    5. Tinbergen, Jan, 1974. "Substitution of Graduate by Other Labour," Kyklos, Wiley Blackwell, vol. 27(2), pages 217-226.
    6. Adrian Adermon & Magnus Gustavsson, 2015. "Job Polarization and Task-Biased Technological Change: Evidence from Sweden, 1975–2005," Scandinavian Journal of Economics, Wiley Blackwell, vol. 117(3), pages 878-917, July.
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    Cited by:

    1. Bütikofer, Aline & Peri, Giovanni, 2017. "The Effects of Cognitive and Noncognitive Skills on Migration Decisions," Discussion Paper Series in Economics 17/2017, Norwegian School of Economics, Department of Economics.
    2. Marcelo Arbex & Enlinson Mattos, 2017. "Optimal Paternalistic Health and Human Capital Policies," Working Papers 1709, University of Windsor, Department of Economics.

    More about this item

    Keywords

    wage inequality; sorting; returns to skills; cognitive skills; noncognitive skills;

    JEL classification:

    • 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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