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Different Degrees of Skill Obsolescence across Hard and Soft Skills and the Role of Lifelong Learning for Labor Market Outcomes

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  • Schultheiss, Tobias

    (University of Zurich)

  • Backes-Gellner, Uschi

    (University of Zurich)

Abstract

This paper examines the role of lifelong learning in counteracting skill depreciation and obsolescence. We build on findings showing that different skill types have structurally different depreciation rates. We differentiate between occupations with more hard skills versus more soft skills. To do so, we draw on representative job advertisement data that contain machine-learning categorized skill requirements and cover the Swiss job market in great detail across occupations (from 1950–2019). We examine lifelong learning effects for "harder" versus "softer" occupations, thereby analyzing the role of training in counteracting skill depreciation in occupations that are differently affected by skill depreciation. Our results reveal novel patterns regarding the benefits from lifelong learning across occupations: In harder occupations, with large shares of fast-depreciating hard skills, the role of lifelong learning is primarily as a hedge against unemployment risks rather than a boost to wages. In contrast, in softer occupations, in which workers build on more value-stable soft skill foundations, the role of lifelong learning instead lies mostly in acting as a boost for upward career mobility and leads to larger wage gains.

Suggested Citation

  • Schultheiss, Tobias & Backes-Gellner, Uschi, 2022. "Different Degrees of Skill Obsolescence across Hard and Soft Skills and the Role of Lifelong Learning for Labor Market Outcomes," IZA Discussion Papers 15688, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp15688
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    More about this item

    Keywords

    hedging against unemployment; skill depreciation; lifelong learning; soft vs. hard occupations; boosting wages;
    All these keywords.

    JEL classification:

    • M53 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Training
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • I2 - Health, Education, and Welfare - - Education

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