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Social skills and the individual wage growth of less educated workers

Author

Listed:
  • Philippe Aghion

    (Institute for Fiscal Studies)

  • Antonin Bergeaud

    (Institute for Fiscal Studies)

  • Richard Blundell

    (Institute for Fiscal Studies)

  • Rachel Griffith

    (Institute for Fiscal Studies)

Abstract
We use matched employee-employer data from the UK to highlight the importance of social skills, including the ability to work well in a team and communicate effectively with co-workers, as a driver for individual wage growth for workers with few formal educational qualifications. We show that lower educated workers in occupations where social skills are more important experience steeper wage growth with tenure, and also higher early exit rates, than equivalent workers in occupations where social skills are less important. Moreover, the return to tenure in occupations where social skills are important is stronger in firms with a larger share of higher educated workers. We rationalize our findings using a model of wage bargaining with complementarity between the skills and abilities of less educated workers and the firm's other assets.
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Suggested Citation

  • Philippe Aghion & Antonin Bergeaud & Richard Blundell & Rachel Griffith, 2023. "Social skills and the individual wage growth of less educated workers," IFS Working Papers W23/25, Institute for Fiscal Studies.
    • Handle: RePEc:ifs:ifsewp:23/25
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    File URL: https://ifs.org.uk/sites/default/files/2023-09/WP202325-Social-skills-and-the-individual-wage-growth-of-less-educated-workers.pdf
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    References listed on IDEAS

    as
    1. Richard Blundell & Monica Costa Dias & Costas Meghir & Jonathan Shaw, 2016. "Female Labor Supply, Human Capital, and Welfare Reform," Econometrica, Econometric Society, vol. 84, pages 1705-1753, September.
    2. Eric A. Hanushek & Guido Schwerdt & Ludger Woessmann & Lei Zhang, 2017. "General Education, Vocational Education, and Labor-Market Outcomes over the Lifecycle," Journal of Human Resources, University of Wisconsin Press, vol. 52(1), pages 48-87.
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    5. Per-Anders Edin & Peter Fredriksson & Martin Nybom & Björn Öckert, 2022. "The Rising Return to Noncognitive Skill," American Economic Journal: Applied Economics, American Economic Association, vol. 14(2), pages 78-100, April.
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    Cited by:

    1. Ludger Woessmann, 2024. "Skills and Earnings: A Multidimensional Perspective on Human Capital," CESifo Working Paper Series 11428, CESifo.

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    More about this item

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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