The Rising Return to Non-cognitive Skill
- American Economic Journal: Applied Economics (Forthcoming)
This paper uses administrative data from Sweden to document
trends in the labor market returns to skills. Between 1992 and
2013, the economic return to non-cognitive skill—a psychologist-assessed measure of teamwork and leadership skill—roughly doubled. The return to cognitive skill was relatively stable and decreased modestly during the 2000s, however. Among men with similar levels of education, the return to non-cognitive skill is higher
than the return to cognitive skill. The increasing return to non-cognitive skill is driven by changes at the top of the wage distribution and by sorting into higher-paying occupations.
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