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Cited by 199Labor market dynamics and wage inequalityLabor Market and EducationDigital literacy in education

What is the price of a skill? The value of complementarity

Open access
Stephany, Fabian, Teutloff, Ole·2024·Research Policy
DOI 10.1016/j.respol.2023.104898
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Abstract

The global workforce is urged to constantly reskill, as technological change favours particular new skills while making others redundant. But which skills are a good investment for workers and firms? As skills are seldomly applied in isolation, we propose that complementarity strongly determines a skill's economic value. For 962 skills, we demonstrate that their value is determined by complementarity – that is, how many different skills, ideally of high value, a competency can be combined with. We show that the value of a skill is relative, as it depends on the skill background of the worker. For most skills, their value is highest when used in combination with skills of a different type. We put our model to the test with a set of skills related to Artificial Intelligence (AI). We find that AI skills are particularly valuable – increasing worker wages by 21 % on average – because of their strong complementarities and their rising demand in recent years. The model and metrics of our work can inform the policy and practice of digital re-skilling to reduce labour market mismatches. In cooperation with data and education providers, researchers and policy makers should consider using this blueprint to provide learners with personalised skill recommendations that complement their existing capacities and fit their occupational background.

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1 of the 66 references couldn’t be matched to a known paper.

Research works printed but not linked: 10

  1. Alabdulkareem, 2018, Unpacking the polarization of workplace skills. Science, Advances, 4
  2. Bastian, 2014, Linkedin skills: large-scale topic extraction and inference, Proceedings of the 8th ACM conference on recommender systems, 1
  3. Braesemann, 2021, The polarisation of remote work (arXiv:2108.13356), arXiv · arXiv
  4. Calanca, 2019, Responsible team players wanted: an analysis of soft skill requirements in job advertisements. EPJ data, Science, 8, Article 1
  5. Demange, 2022, Estimating effects of parents’ cognitive and non-cognitive skills on offspring education using polygenic scores. Nature, Communications, 13(1), Article 1
  6. Grundke, 2018, Which skills for the digital era?: returns to skills analysis, OECD.
  7. Neffke, 2019, The value of complementary co-workers. Science, Advances, 5, eaax3370
  8. OECD. (2021a). AI and the Future of Skills, Volume 1: Capabilities and Assessments. Organisation for Economic Co-operation and Development. https://www.oecd-ilibrary.org/education/ai-and-the-future-of-skills-volume-1_5ee71f34-en.
  9. Squicciarini, 2021, Demand for AI skills in jobs: evidence from online job postings, OECD.
  10. Stephany, 2020, Distancing Bonus or downscaling loss? The changing livelihood of us online Workers in Times of COVID-19, Journal of Economic and Human Geography, 111, 561

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Authors
Stephany, F., & Teutloff, O.
Affiliations
  • Bruegel (BE)
  • University of Copenhagen (DK)
Corresponding author
Stephany, Fabian
ORCID
Venue
Research Policy
Publisher
Elsevier BV
Published
2024-01
Volume
53
Issue
1
Pages
104898
ISSN
0048-7333 (ISSN-L)
DOI
10.1016/j.respol.2023.104898
OpenAlex
W4387794313
Semantic Scholar
3751f50d9b59a9804e271572fcd47c100ceae93d
Cited by
199
References
66
Citations by year
2026: 37 · 2025: 42 · 2024: 118 · 2023: 2
FWCI
37.80
Type
journal article
Language
en
Open access
Licence
Locations
  • Research Policy (publishedVersion, cc-by)
  • Research at the University of Copenhagen (University of Copenhagen) (publishedVersion, cc-by)
Funders
Economic and Social Research Council (G2781-15)
Topics
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Labor market dynamics and wage inequality
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Labor Market and Education
  • Physical Sciences › Computer Science › Information Systems › Digital literacy in education
Keywords
skill complementarity, retraining, digital skills, AI competencies, labor market mismatch, skill combination

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