Please use this identifier to cite or link to this item:
Edin, Per-Anders
Fredriksson, Peter
Nybom, Martin
Öckert, Björn
Year of Publication: 
Series/Report no.: 
Working Paper No. 2018:18
Institute for Evaluation of Labour Market and Education Policy (IFAU), Uppsala
We examine the changes in the rewards to cognitive and non-cognitive skill during the time period 1992-2013. Using unique administrative data for Sweden, we document a secular increase in the returns to non-cognitive skill. This increase is particularly pronounced in the private sector, at the upper-end of the wage distribution, and relative to the evolution of the return to cognitive skill. Sorting across occupations responded to changes in the returns to skills. Workers with an abundance of non-cognitive skill were increasingly sorted into abstract and nonroutine occupations, for example. Such occupations also saw greater increases in the relative return to non-cognitive skill. This suggests that the optimal skill mixes of jobs have changed over time, that there is sorting on comparative advantage, and that demand-side factors are primarily driving the evolution of the return to non-cognitive skill. Consistent with this, we also show that hikes in offshoring and IT-investments increase the relative reward to non-cognitive skill and the relative intensity of non-cognitive skill usage.
Wage inequality
skill returns
cognitive/non-cognitive skill
Document Type: 
Working Paper

Files in This Item:
949.65 kB

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.