The rising return to non-cognitive skills

Arbeitspapier

We examine the changes in the 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. This increase is particularly pronounced in the private sector, at the upper-end of the wage distribution, and relative to the evolution of the return to cognitive skill. Sorting across occupations responded to changes in the returns to skills. Workers with an abundance of non-cognitive skill were increasingly sorted into abstract and non-routine occupations, for example. Such occupations also saw greater increases in the relative return to non-cognitive skill. This suggests that the optimal skill mixes of jobs have changed over time, that there is sorting on comparative advantage, and that demand-side factors are primarily driving the evolution of the return to non-cognitive skill. Consistent with this, we also show that hikes in offshoring and IT-investments increase the relative reward to non-cognitive skill and the relative intensity of non-cognitive skill usage.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 2018:15

Classification and Topics

• Classification: Wirtschaft ; Human Capital; Skills; Occupational Choice; Labor Productivity ; Wage Level and Structure; Wage Differentials
• Subject: Wage inequality ; sorting ; skill returns ; cognitive/non-cognitive skill

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Edin, Per-Anders ; Fredriksson, Peter ; Nybom, Martin ; Öckert, Björn
• Event: Veröffentlichung
• (who): Uppsala University, Department of Economics
• (where): Uppsala
• (when): 2018

Further information

• Handle: http://hdl.handle.net/10419/197667
• URN: urn:nbn:se:uu:diva-368414
• Last update: 10.03.2025, 11:42 AM CET