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About Annual Meeting
Research on skill dynamics and the wage structure has predominantly focused on the rising returns to knowledge and analytical skills. Little is known about the potential benefits of social skills, despite mounting evidence of high demand for social skills among employers. Moreover, recent research suggests that the greatest returns to skill are associated with a mix of analytical and social skills (i.e., skill complementarity). To test these ideas, we combine worker data from the Panel Study on Income Dynamics with occupational skill information from the O*NET database. We use multi-trajectory models to identify workers who have experienced high growth in skill complementarity. The results show that women are less likely than men to accumulate skill complementarity – particularly for complementarity that combines analytical skills with coordination and communicative social skills as opposed to emotional social skills. Analytical and social skills each have independent positive effects on wages, but the combined effect of both sets of skills on wages is negative. These results are consistent across different forms of skill complementarity and across gender-specific models. On balance, the findings therefore imply that men and women are sorted into different forms of skill complementarity jobs, but that labor market returns to skill complementarity have been overstated.