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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, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp16746
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    More about this item

    Keywords

    cognitive skills; social skills; training; recessions;
    All these keywords.

    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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