The Labor Market Value of Non-Cognitive Skills

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In the last half-century, a large academic literature has emerged documenting the empirical re-lationship between non-cognitive skills and labor market outcomes. In this paper, I review thisliterature, putting emphasis on new work in economics. The literature provides overwhelmingevidence that non-cognitive skills (e.g. internal locus of control, social skills, motivation, etc.) are associated with, and likely cause, labor market success. Furthermore, I summarize a grow-ing literature that documents the rising value of non-cognitive skills relative to cognitive skills,especially post 2000, and that, due to the nature technological change, this trend is likely tocontinue. Finally, I document two shortcomings of the literature: (1) no study has successfullyisolated the causal effect of non-cognitive skills training in a developed country and (2) verylittle is known about the value of signaling non-cognitive skills to employers.