Article Green Open Access 2022

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

Labour Economics
Journal · Vol. 78 · Art. 102235
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. © 2022 Elsevier B.V.

Keywords

Author Keywords

vocational education and training Wages unemployment Labour market search Multidimensional skills

Index Keywords

Author Affiliations
University of Technology Sydney, Sydney, NSW, Australia
Swiss National Bank, Zurich, ZH, Switzerland
Universität Basel, Basel, BS, Switzerland, Université de Lausanne (UNIL), Lausanne, VD, Switzerland
Funding & Acknowledgements
Schweizerischer Nationalfonds zur Förderung der Wissenschaftlichen Forschung, SNF
Grant: 51NF40-160590, P1ZHP1_155498
Funding text 1: We thank two anonymous referees and the editor Jessica Pan for valuable suggestions. This paper is part of a special issue for the 2021 AASLE conference. This study was partly funded by the Swiss Secretariat for Education, Research and Innovation through its Leading House on the Economics of Education, Firm Behaviour and Training Policies. We also received support from the Swiss National Centre of Competence in Research LIVES - Overcoming vulnerability: Life course perspectives, which is financed by the Swiss National Science Foundation (grant number: 51NF40-160590), and an SNSF Doc.Mobility Scholarship (project number: P1ZHP1_155498). We thank Uschi Backes-Gellner, Simone Balestra, Adeline Delavande, Xiaodong Fang, Chris Flinn, Miriam Gensowski, Kalaivani Karunanethy, Rafael Lalive, Mark Lambiris, Shiko Maruyama, Peter Siminski, Denni Tommasi, and Conny Wunsch for valuable comments on this and earlier versions. The paper also benefitted from comments of participants at the SSES Annual Congress (St. Gallen), the University of Technology Sydney, the Melbourne Institute, the Australasian Labour Econometrics Workshop (Adelaide) and the 2021 AASLE Conference (Bejing). The views expressed in this study are the authors’ and do not necessarily reflect those of the Swiss National Bank.; Funding text 2: ☆ We thank two anonymous referees and the editor Jessica Pan for valuable suggestions. This paper is part of a special issue for the 2021 AASLE conference. This study was partly funded by the Swiss Secretariat for Education, Research and Innovation through its Leading House on the Economics of Education, Firm Behaviour and Training Policies. We also received support from the Swiss National Centre of Competence in Research LIVES - Overcoming vulnerability: Life course perspectives, which is financed by the Swiss National Science Foundation (grant number: 51NF40-160590), and an SNSF Doc.Mobility Scholarship (project number: P1ZHP1_155498). We thank Uschi Backes-Gellner, Simone Balestra, Adeline Delavande, Xiaodong Fang, Chris Flinn, Miriam Gensowski, Kalaivani Karunanethy, Rafael Lalive, Mark Lambiris, Shiko Maruyama, Peter Siminski, Denni Tommasi, and Conny Wunsch for valuable comments on this and earlier versions. The paper also benefitted from comments of participants at the SSES Annual Congress (St. Gallen), the University of Technology Sydney, the Melbourne Institute, the Australasian Labour Econometrics Workshop (Adelaide) and the 2021 AASLE Conference (Bejing). The views expressed in this study are the authors’ and do not necessarily reflect those of the Swiss National Bank.
Schweizerischer Nationalfonds zur Förderung der Wissenschaftlichen Forschung, SNF
Funding text 1: We thank two anonymous referees and the editor Jessica Pan for valuable suggestions. This paper is part of a special issue for the 2021 AASLE conference. This study was partly funded by the Swiss Secretariat for Education, Research and Innovation through its Leading House on the Economics of Education, Firm Behaviour and Training Policies. We also received support from the Swiss National Centre of Competence in Research LIVES - Overcoming vulnerability: Life course perspectives, which is financed by the Swiss National Science Foundation (grant number: 51NF40-160590), and an SNSF Doc.Mobility Scholarship (project number: P1ZHP1_155498). We thank Uschi Backes-Gellner, Simone Balestra, Adeline Delavande, Xiaodong Fang, Chris Flinn, Miriam Gensowski, Kalaivani Karunanethy, Rafael Lalive, Mark Lambiris, Shiko Maruyama, Peter Siminski, Denni Tommasi, and Conny Wunsch for valuable comments on this and earlier versions. The paper also benefitted from comments of participants at the SSES Annual Congress (St. Gallen), the University of Technology Sydney, the Melbourne Institute, the Australasian Labour Econometrics Workshop (Adelaide) and the 2021 AASLE Conference (Bejing). The views expressed in this study are the authors’ and do not necessarily reflect those of the Swiss National Bank.; Funding text 2: ☆ We thank two anonymous referees and the editor Jessica Pan for valuable suggestions. This paper is part of a special issue for the 2021 AASLE conference. This study was partly funded by the Swiss Secretariat for Education, Research and Innovation through its Leading House on the Economics of Education, Firm Behaviour and Training Policies. We also received support from the Swiss National Centre of Competence in Research LIVES - Overcoming vulnerability: Life course perspectives, which is financed by the Swiss National Science Foundation (grant number: 51NF40-160590), and an SNSF Doc.Mobility Scholarship (project number: P1ZHP1_155498). We thank Uschi Backes-Gellner, Simone Balestra, Adeline Delavande, Xiaodong Fang, Chris Flinn, Miriam Gensowski, Kalaivani Karunanethy, Rafael Lalive, Mark Lambiris, Shiko Maruyama, Peter Siminski, Denni Tommasi, and Conny Wunsch for valuable comments on this and earlier versions. The paper also benefitted from comments of participants at the SSES Annual Congress (St. Gallen), the University of Technology Sydney, the Melbourne Institute, the Australasian Labour Econometrics Workshop (Adelaide) and the 2021 AASLE Conference (Bejing). The views expressed in this study are the authors’ and do not necessarily reflect those of the Swiss National Bank.
University of Technology Sydney, UTS
Funding text 1: We thank two anonymous referees and the editor Jessica Pan for valuable suggestions. This paper is part of a special issue for the 2021 AASLE conference. This study was partly funded by the Swiss Secretariat for Education, Research and Innovation through its Leading House on the Economics of Education, Firm Behaviour and Training Policies. We also received support from the Swiss National Centre of Competence in Research LIVES - Overcoming vulnerability: Life course perspectives, which is financed by the Swiss National Science Foundation (grant number: 51NF40-160590), and an SNSF Doc.Mobility Scholarship (project number: P1ZHP1_155498). We thank Uschi Backes-Gellner, Simone Balestra, Adeline Delavande, Xiaodong Fang, Chris Flinn, Miriam Gensowski, Kalaivani Karunanethy, Rafael Lalive, Mark Lambiris, Shiko Maruyama, Peter Siminski, Denni Tommasi, and Conny Wunsch for valuable comments on this and earlier versions. The paper also benefitted from comments of participants at the SSES Annual Congress (St. Gallen), the University of Technology Sydney, the Melbourne Institute, the Australasian Labour Econometrics Workshop (Adelaide) and the 2021 AASLE Conference (Bejing). The views expressed in this study are the authors’ and do not necessarily reflect those of the Swiss National Bank.; Funding text 2: ☆ We thank two anonymous referees and the editor Jessica Pan for valuable suggestions. This paper is part of a special issue for the 2021 AASLE conference. This study was partly funded by the Swiss Secretariat for Education, Research and Innovation through its Leading House on the Economics of Education, Firm Behaviour and Training Policies. We also received support from the Swiss National Centre of Competence in Research LIVES - Overcoming vulnerability: Life course perspectives, which is financed by the Swiss National Science Foundation (grant number: 51NF40-160590), and an SNSF Doc.Mobility Scholarship (project number: P1ZHP1_155498). We thank Uschi Backes-Gellner, Simone Balestra, Adeline Delavande, Xiaodong Fang, Chris Flinn, Miriam Gensowski, Kalaivani Karunanethy, Rafael Lalive, Mark Lambiris, Shiko Maruyama, Peter Siminski, Denni Tommasi, and Conny Wunsch for valuable comments on this and earlier versions. The paper also benefitted from comments of participants at the SSES Annual Congress (St. Gallen), the University of Technology Sydney, the Melbourne Institute, the Australasian Labour Econometrics Workshop (Adelaide) and the 2021 AASLE Conference (Bejing). The views expressed in this study are the authors’ and do not necessarily reflect those of the Swiss National Bank.
Staatssekretariat für Bildung, Forschung und Innovation, SBFI
Funding text 1: We thank two anonymous referees and the editor Jessica Pan for valuable suggestions. This paper is part of a special issue for the 2021 AASLE conference. This study was partly funded by the Swiss Secretariat for Education, Research and Innovation through its Leading House on the Economics of Education, Firm Behaviour and Training Policies. We also received support from the Swiss National Centre of Competence in Research LIVES - Overcoming vulnerability: Life course perspectives, which is financed by the Swiss National Science Foundation (grant number: 51NF40-160590), and an SNSF Doc.Mobility Scholarship (project number: P1ZHP1_155498). We thank Uschi Backes-Gellner, Simone Balestra, Adeline Delavande, Xiaodong Fang, Chris Flinn, Miriam Gensowski, Kalaivani Karunanethy, Rafael Lalive, Mark Lambiris, Shiko Maruyama, Peter Siminski, Denni Tommasi, and Conny Wunsch for valuable comments on this and earlier versions. The paper also benefitted from comments of participants at the SSES Annual Congress (St. Gallen), the University of Technology Sydney, the Melbourne Institute, the Australasian Labour Econometrics Workshop (Adelaide) and the 2021 AASLE Conference (Bejing). The views expressed in this study are the authors’ and do not necessarily reflect those of the Swiss National Bank.; Funding text 2: ☆ We thank two anonymous referees and the editor Jessica Pan for valuable suggestions. This paper is part of a special issue for the 2021 AASLE conference. This study was partly funded by the Swiss Secretariat for Education, Research and Innovation through its Leading House on the Economics of Education, Firm Behaviour and Training Policies. We also received support from the Swiss National Centre of Competence in Research LIVES - Overcoming vulnerability: Life course perspectives, which is financed by the Swiss National Science Foundation (grant number: 51NF40-160590), and an SNSF Doc.Mobility Scholarship (project number: P1ZHP1_155498). We thank Uschi Backes-Gellner, Simone Balestra, Adeline Delavande, Xiaodong Fang, Chris Flinn, Miriam Gensowski, Kalaivani Karunanethy, Rafael Lalive, Mark Lambiris, Shiko Maruyama, Peter Siminski, Denni Tommasi, and Conny Wunsch for valuable comments on this and earlier versions. The paper also benefitted from comments of participants at the SSES Annual Congress (St. Gallen), the University of Technology Sydney, the Melbourne Institute, the Australasian Labour Econometrics Workshop (Adelaide) and the 2021 AASLE Conference (Bejing). The views expressed in this study are the authors’ and do not necessarily reflect those of the Swiss National Bank.
National Center of Competence in Research Chemical Biology, NCCR-CB
Funding text 1: We thank two anonymous referees and the editor Jessica Pan for valuable suggestions. This paper is part of a special issue for the 2021 AASLE conference. This study was partly funded by the Swiss Secretariat for Education, Research and Innovation through its Leading House on the Economics of Education, Firm Behaviour and Training Policies. We also received support from the Swiss National Centre of Competence in Research LIVES - Overcoming vulnerability: Life course perspectives, which is financed by the Swiss National Science Foundation (grant number: 51NF40-160590), and an SNSF Doc.Mobility Scholarship (project number: P1ZHP1_155498). We thank Uschi Backes-Gellner, Simone Balestra, Adeline Delavande, Xiaodong Fang, Chris Flinn, Miriam Gensowski, Kalaivani Karunanethy, Rafael Lalive, Mark Lambiris, Shiko Maruyama, Peter Siminski, Denni Tommasi, and Conny Wunsch for valuable comments on this and earlier versions. The paper also benefitted from comments of participants at the SSES Annual Congress (St. Gallen), the University of Technology Sydney, the Melbourne Institute, the Australasian Labour Econometrics Workshop (Adelaide) and the 2021 AASLE Conference (Bejing). The views expressed in this study are the authors’ and do not necessarily reflect those of the Swiss National Bank.; Funding text 2: ☆ We thank two anonymous referees and the editor Jessica Pan for valuable suggestions. This paper is part of a special issue for the 2021 AASLE conference. This study was partly funded by the Swiss Secretariat for Education, Research and Innovation through its Leading House on the Economics of Education, Firm Behaviour and Training Policies. We also received support from the Swiss National Centre of Competence in Research LIVES - Overcoming vulnerability: Life course perspectives, which is financed by the Swiss National Science Foundation (grant number: 51NF40-160590), and an SNSF Doc.Mobility Scholarship (project number: P1ZHP1_155498). We thank Uschi Backes-Gellner, Simone Balestra, Adeline Delavande, Xiaodong Fang, Chris Flinn, Miriam Gensowski, Kalaivani Karunanethy, Rafael Lalive, Mark Lambiris, Shiko Maruyama, Peter Siminski, Denni Tommasi, and Conny Wunsch for valuable comments on this and earlier versions. The paper also benefitted from comments of participants at the SSES Annual Congress (St. Gallen), the University of Technology Sydney, the Melbourne Institute, the Australasian Labour Econometrics Workshop (Adelaide) and the 2021 AASLE Conference (Bejing). The views expressed in this study are the authors’ and do not necessarily reflect those of the Swiss National Bank.
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