The Rising Return to Non-Cognitive Skill

Per-Anders Edin, Peter Fredriksson, Martin Nybom and Björn Öckert

No 10914, IZA Discussion Papers from Institute of Labor Economics (IZA)

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.

Keywords: wage inequality; sorting; returns to skills; cognitive skills; noncognitive skills (search for similar items in EconPapers)
JEL-codes: J24 J31 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2017-07
New Economics Papers: this item is included in nep-lma, nep-ltv and nep-neu
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Citations: View citations in EconPapers (23)

Published - published in American Economic Journal: Applied Economics, 2022, 14 (2), 78-100

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Related works:
Journal Article: The Rising Return to Noncognitive Skill (2022)
Working Paper: The rising return to non-cognitive skill (2018)
Working Paper: The Rising Return to Non-cognitive Skills* (2018)
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