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Recessions and the Labor Market Returns to Cognitive and Social Skills

Author

Listed:
  • Frisvold, David E.

    (University of Iowa)

  • Kim, Sun Hyung

    (Shanghai University)

Abstract

Although recessions negatively affect labor market outcomes, we find that individuals with greater cognitive skills have been less affected by recessions since 2000 compared to those in the 1980s and 1990s. This result occurs despite a decrease in the returns to cognitive skills over the last few decades, on average. We argue that changes in the provision of employer-paid training can help explain the relative return to cognitive skills during recent recessions due to lower training costs and enhanced labor productivity. Consistent with this, we find that firms provide more training to workers with higher cognitive skills during post-2000 recessions.

Suggested Citation

  • Frisvold, David E. & Kim, Sun Hyung, 2024. "Recessions and the Labor Market Returns to Cognitive and Social Skills," IZA Discussion Papers 16746, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp16746
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    References listed on IDEAS

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    1. Kahn, Lisa B., 2010. "The long-term labor market consequences of graduating from college in a bad economy," Labour Economics, Elsevier, vol. 17(2), pages 303-316, April.
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    Cited by:

    1. Benner, Niklas & Heuer, Felix & Kamb, Rebecca & Storm, Eduard, 2025. "Do economic crises reshape the skill content of Jobs? Evidence from organizational changes in the post-pandemic era," Ruhr Economic Papers 1195, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    2. Pietro Giorgio Lovaglio & Mattia Riussi, 2025. "How is Labour Demand Changing Across European Regions in the Post-COVID-19 Era," International Regional Science Review, , vol. 48(5-6), pages 524-575, November.

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    More about this item

    Keywords

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    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • 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
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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