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The Rising Return to Non-Cognitive Skill

Author

Listed:
  • Edin, Per-Anders

    (IFAU)

  • Fredriksson, Peter

    (Uppsala University)

  • Nybom, Martin

    (Uppsala 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 of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp10914
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    More about this item

    Keywords

    wage inequality; sorting; returns to skills; cognitive skills; noncognitive skills;
    All these keywords.

    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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