Soft Skills and their Wage Returns: Overview of Empirical Literature

Issue: 1/2014

Jiří Balcar

RPIC-ViP s.r.o., Výstavní 2224/8, 709 00, Ostrava, Czech Republic. E-mail: balcar@rpic-vip.cz

Psychological traits, attitudes and soft skills represent factors whose effect on an individual’s wages has begun to be examined recently. Today, there is an extensive empirical body on wage returns to the first two factors, but still a relatively small one on wage returns to soft skills, such as communication, cooperation, leadership etc. The aim of this paper is to provide an overview of empirical literature on wage returns to soft skills. It suggests that soft skills are connected with significant wage returns and contribute to closing the gender wage gap. The end of the paper focuses on a discussion on methodological approaches to measurement of soft skills and relevancy of their approximation by job characteristics (incl. suggestion of using tools of competency modelling for this purpose).

Pages: 
3–15
DOI: 10.2478/revecp-2014-0001
JEL: J71, J31, J24
Keywords: wage returns, wage gap, Soft skills, skills-job match
References: 

 

Andrisani, P. J. (1977). Internal-External Attitudes, Personal Initiative, and the Labor Market Experience of Blackand White Men. The Journal of Human Resources, 12 (3). Pp. 308-328. DOI: 10.2307/145493

Bacolod, M., Blum, B. S. (2008). Two Sides of the Same Coin: U.S. “Residual” Inequality and the Gender Gap. Retrieved June 1, 2012, from

http://www.rotman.utoronto.ca/bblum/personal/2%20sides.pdf

Balcar, J. (2012). Supply Side Wage Determinants: Overview of Empirical Literature. Review of Economic Perspectives, 12 (4). Pp 207-222. DOI: 10.7327/cerei.2011.03.01

Balcar, J. (2011). Future skills needs in EU and skills transferability in 2020: Sector meta-analysis. ER - Central European Review of Economic Issues, 14 (1). Pp. 5-20.

Balcar, J., Homolová, E., Karásek, Z. et al. (2011). Transferable competences across economic sectors: Role and importance for Employment at European level. Luxembourg: Publications Office of the European Union. ISBN 978-92-79-20946-8.

Black, S. E., Spitz-Oener, A. (2007). Explaining Women’s Success: Technological Change and the Skill Content of Women’s Work.

Retrieved June 1, 2012, from http://ftp.iza.org/dp2803.pdf

Borghans, L., Weel, B. ter, Weinberg, B. A. (2008). Interpersonal Styles and Labor Market Outcomes. Journal of Human Resources, 43 (4). Pp. 815-858.

Borghans, L., Weel, B. ter, Weinberg, B. A. (2006). People People: Social Capital and the Labor-Market Outcomes of Underrepresented Groups.

Retrieved June 1, 2012, from http://www.nber.org/papers/ w11985.pdf

Conti, G., Galeotti, A., Mueller, G., Pudney, S. (2009). Popularity.

Retrieved June 1, 2012, from

http://www.iser.essex.ac.uk/publications/working-papers/iser/2009-03.pdf

Dunifon, R., Duncan, G. J. (1998). Long-Run Effects of Motivation on Labor-Market Success. Social Psychology Quarterly, 61 (1). Pp. 33-48.

Fortin, N. M. (2008). The Gender m among Young Adults in the United States: The Importance of Money vs. People. Journal of Human Resources, 43 (4). Pp. 884-918. DOI: 10.1353/jhr.2008.0006

Kubeš, M., Spillerová, D., Kurnický, R. (2004). Manažerské competence. Praha: Gradiva Publishing. ISBN 80-247-0698-9.

Kuhn, P., Weinberger, C. (2005). Leadership Skills and Wages. Journal of Labor Economics, 23 (3). Pp. 395-436. DOI: 10.1086/430282

Machin, S., McIntosh, S., Vignoles, A., Viitanen, T. (2001). Basic Skills, Soft Skills and Labour Market Outcomes: Secondary Analysis of the National Child Development Study. Retrieved June 1, 2012, from

https://www.education.gov.uk/publications/eOrderingDownload/RR250.pdf

NSP (2011). Manuál pro tvorbu katalogu Národní soustavy povolání, určeno pro členy sektorových rad, expertních týmů a pracovních skupin, ver. 2. Retrieved June 1, 2012, from http://katalog.nsp.cz/Napoveda/Manual_pro_SR_NSP_II.pdf

Reber, A. S., Reber, E. (2001). The Penguin Dictionary of Psychology. London: Penguin Books. ISBN 0-14-051451-1.

Semykina, A., Linz, S. J. (2007). Gender differences in personality and earnings: Evidence from Russia. Journal of Economic Psychology, 28 (3). Pp. 387-410. DOI: 10.1016/j.joep.2006.05.004

Statt, D. A. (1998). The Concise Dictionary of Psychology. London: Routledge. ISBN 0-415-17939-4.

Turner, Ch. F., Martinez, D. C. (1977). Socioeconomic Achievement and the Machiavellian Personality. Sociometry, 40 (4). Pp. 325-336. DOI: 10.2307/3033481

Weinberger, C. (2011). The Increasing Complementarity between Cognitive and Social Skills, Retrieved June 1, 2012, from

http://www.econ.ucsb.edu/~weinberg/MathSocialWeinberger.pdf