Wage growth of less educated workers: the importance of social skills

Philippe Aghion, Antonin Bergeaud, Richard Blundell and Rachel Griffith

We use matched employee–employer data from the UK to investigate the
importance of social skills, in particular teamwork and communication with
co-workers, as a driver of wage growth for workers with lower formal education.
We find that in social skill tasks, a significant fraction of less-educated workers
enjoy wage progression with tenure, and higher returns in firms with more educated
co-workers. We rationalize these dynamics through a model in which social skills—
initially opaque to both employee and employer—become increasingly apparent over time
through complementarity with firm assets.

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• latest version: IFS WP 24/08

• Web Appendix "How we construct measures of social skill using O*NET data (data and code)"