Labour markets across the developed world are changing rapidly. A prominent feature of this change has been growth in the number of high-skilled jobs and a decline in `routine’ jobs (secretaries, jobs on the assembly line). Accompanying this broad change, recent research for the US and Sweden (Deming, 2017, Edin et al. 2017) suggests there has been a large increase in the demand for workers with strong social skills.
Our aim in this project is to investigate whether there has been an increase in the wage premium of workers endowed with social skills over recent decades in the UK.
The UK represents an interesting case study. This is because it has recently experienced a large increase in the number of managers, possibly as a response to the concurrent increase in the supply of university graduates (Blundell et al. 2016). As managerial performance is highly correlated with emotional intelligence (Ryan et al. 2009; Riggio and Reichard 2008), the demand for social skills could have increased at an even faster pace in the UK than in other countries.
In order to explore the rising importance of social skills in the UK, Professor Del Bono and Dr Etheridge will use data on labour market outcomes and individual skill measures from two UK birth cohort studies: the British Children of the 70s (BCS) and the Avon Longitudinal Study of Parents and Children (ALSPAC). BCS is based on a nationally representative sample of children born in 1970. ALSPAC samples children born around 1991.
Our analysis will feature a between-cohort comparison of the earnings of individuals according to their pre-adult measures of social skills. We are also interested in how social skills are priced in different types of occupations. Specifically, we will classify occupations according to whether they are intensive in interpersonal task requirements using the Occupational Information Network (O*NET), a survey administered by the US Department of Labor to workers in different occupations. These data refer to occupations in the US, but we can map task requirements into the UK occupational classification, as recently demonstrated in Dickerson and Morris (2019).
Policy relevance
It is expected that this project will be of interest to academic economists working in the area of labour markets, but also non-academic audiences interested in understanding the role of different human capital skills. Specifically, this project will be relevant to:
• Government departments, such as the Department for Work and Pensions, which will be interested in which groups of workers are most likely to see increases/reductions in wages in future as a response to the development of different technologies.
• The education sector in general, represented by the Department for Education, the Office for Students, and Universities UK for example. These organizations will be interested in which skills are most likely to be valued in future and how these highly-valued skills can be developed over the school and university years.
• Employers and associations of employers, such as the Confederation of British Industry (CBI). Skills development does not only occur at school but also at work, and employers will be interested to understand how they need to respond to different demand for skills through training and changes in management practices.