The Growing Importance of Social Skills in the Labor Market*
Abstract
The labor market increasingly rewards social skills. Between 1980 and 2012, jobs requiring high levels of social interaction grew by nearly 12 percentage points as a share of the U.S. labor force. Math-intensive but less social jobs—including many STEM occupations—shrank by 3.3 percentage points over the same period. Employment and wage growth were particularly strong for jobs requiring high levels of both math skill and social skills. To understand these patterns, I develop a model of team production where workers “trade tasks” to exploit their comparative advantage. In the model, social skills reduce coordination costs, allowing workers to specialize and work together more efficiently. The model generates predictions about sorting and the relative returns to skill across occupations, which I investigate using data from the NLSY79 and the NLSY97. Using a comparable set of skill measures and covariates across survey waves, I find that the labor market return to social skills was much greater in the 2000s than in the mid-1980s and 1990s.
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Deming (2017) and Edin et al. (2022) document an increase in the economic returns to social and non-cognitive skills in the United States and Sweden in recent decades.
“Deming (2017) and Edin et al. (2022) document an increase in the economic returns to social and non-cognitive skills in the United States and Sweden in recent decades.”
From Educational Inequality* (2022) · cites this paper as Deming (2017)
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- Authors
- Deming, D. J.
- Affiliations
- Harvard University (US)
- Corresponding author
- Deming, David J.
- ORCID
- Deming, David J.
- Venue
- The Quarterly Journal of Economics
- Publisher
- Oxford University Press (OUP)
- Published
- 2017-06-06
- Volume
- 132
- Issue
- 4
- Pages
- 1593-1640
- ISSN
- 0033-5533 (ISSN-L)
- 1531-4650
- OpenAlex
- W1884571572
- Cited by
- 1,727
- References
- 17
- Citations by year
- 2026: 183 · 2025: 234 · 2024: 205 · 2023: 225 · 2022: 242 · 2021: 196 · 2020: 153 · 2019: 128 · 2018: 107 · 2017: 29 · 2016: 11 · 2015: 9 · 2014: 1 · 2013: 1
- FWCI
- 205.25
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- The Quarterly Journal of Economics (publishedVersion, public-domain)
- RePEc: Research Papers in Economics (submittedVersion)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Labor market dynamics and wage inequality
- Social Sciences › Sociology and Political Science › Migration and Labor Dynamics
- Social Sciences › Sociology and Political Science › Names, Identity, and Discrimination Research
- Keywords
- social skills, social interaction, team production, coordination costs, occupational sorting, returns to skills, STEM careers, mathematical skills, skill complementarity, wage growth, job creation, skill-biased technological change
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