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Interpersonal, cognitive, and manual skills: How do they shape employment and wages?

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  • Girsberger, Esther Mirjam
  • Koomen, Miriam
  • Krapf, Matthias

Abstract

We study how interpersonal, cognitive, and manual skills affect employment and wages in a search and matching model through their impact on productivity, complementarity, job destruction, and the cost of unemployment. Combining several data sets on workers who acquired skills in vocational education and training (VET), we quantify each channel, allowing for unobserved heterogeneity in ability. All three skills increase productivity, yet they affect job destruction rates differentially. While manual skills are associated with lower job destruction, interpersonal and cognitive skills have the opposite effect. Focusing on low-ability workers, we then estimate the value of VET. Through VET, wages increase up to 10% and unemployment drops by over 50%. Low-ability workers thus have particularly large benefits from acquiring manual skills because they increase wages and shield from unemployment.

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  • Girsberger, Esther Mirjam & Koomen, Miriam & Krapf, Matthias, 2022. "Interpersonal, cognitive, and manual skills: How do they shape employment and wages?," Labour Economics, Elsevier, vol. 78(C).
    • Handle: RePEc:eee:labeco:v:78:y:2022:i:c:s0927537122001257
    DOI: 10.1016/j.labeco.2022.102235
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    2. Simon Wiederhold & Christina Langer, 2023. "The Value of Early-Career Skills," Growth Lab Working Papers 204, Harvard's Growth Lab.
    3. Andreas F. Buehler & Patrick Lehnert & Uschi Backes-Gellner, 2023. "Curriculum Updates in Vocational Education and Changes in Graduates' Skills and Wages," Economics of Education Working Paper Series 0205, University of Zurich, Department of Business Administration (IBW).
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    More about this item

    Keywords

    Multidimensional skills; Unemployment; Wages; Vocational education and training; Labour market search;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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