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Wages and employment: The role of occupational skills

Author

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  • Esther Mirjam Girsberger

    (Economics Discipline Group, University of Technology Sydney)

  • Matthias Krapf

    (University of Basel, Switzerland)

  • Miriam Rinawi

    (Swiss National Bank, Switzerland)

Abstract

We study how skills acquired in vocational education and training (VET) affect wages and employment dynamics in Switzerland. We present and estimate a search and matching model for workers with a VET degree who differ in their interpersonal, cognitive and manual skills. Assuming a match productivity which exhibits worker-job complementarity, we estimate how workers� skills map into job offers, wages and unemployment. Firms value cognitive skills on average almost twice as much as interpersonal and manual skills. Moreover, they prize complementarity in cognitive and interpersonal skills. We estimate average returns to VET skills in hourly wages of 9%. Furthermore, VET improves labour market opportunities through higher job arrival rate and lower job destruction. Workers thus have large benefits from getting a VET degree.

Suggested Citation

  • Esther Mirjam Girsberger & Matthias Krapf & Miriam Rinawi, 2019. "Wages and employment: The role of occupational skills," Working Paper Series 2019/01, Economics Discipline Group, UTS Business School, University of Technology, Sydney.
    • Handle: RePEc:uts:ecowps:2019/01
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    Cited by:

    1. Weller, Jürgen, 2022. "Tendencias mundiales, pandemia de COVID-19 y desafíos de la inclusión laboral en América Latina y el Caribe," Documentos de Proyectos 48610, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    2. Piróg Danuta & Hibszer Adam, 2023. "Which Skills are the Most Prized? Analysing Monetary Value of Geographers’ Skills on the Labour Market in Six European Countries," Quaestiones Geographicae, Sciendo, vol. 42(4), pages 63-79, December.
    3. SATO Kaori & NAKAMURO Makiko & OWAN Hideo, 2019. "The Effect of Interpersonal Skills on Worker Performance," Discussion papers 19045, Research Institute of Economy, Trade and Industry (RIETI).
    4. Veli Safak, 2020. "Matching Multidimensional Types: Theory and Application," Papers 2006.14243, arXiv.org.

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    More about this item

    Keywords

    Occupational training; labour market search; multidimensional skills.;
    All these keywords.

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • 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
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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