People Skills and the Labor-Market Outcomes of Underrepresented Groups

Posted: 17 Apr 2014

See all articles by Lex Borghans

Lex Borghans

Maastricht University - Department of Economics; University of Maastricht - Research Centre for Education and the Labour Market (ROA); IZA Institute of Labor Economics

Bas ter Weel

University of Amsterdam - SEO Economic Research; Institute for the Study of Labor (IZA)

Bruce A. Weinberg

Ohio State University (OSU) - Economics; Institute for the Study of Labor (IZA); National Bureau of Economic Research (NBER)

Date Written: April 1, 2014

Abstract

In this article, the authors show that people skills are important determinants of labor-market outcomes, including occupational choice and wages. Technological and organizational changes have increased the importance of people skills in the workplace. The authors particularly focus on how the increased importance of these skills has affected the labor-market outcomes of underrepresented groups, assuming that gender differences in interactions and cultural differences and prejudice may impede cross-racial and ethnic interactions. Estimates for Britain, Germany, and the United States are consistent with such an explanation. An acceleration in the rate of increase in the importance of people skills between the late 1970s and early 1990s in the United States can help explain why the gender wage gap closed and the black-white wage gap stagnated in these years relative to the preceding and following years.

Keywords: interpersonal interactions, wage level and structure, economics, race, ethnicity, gender

JEL Classification: J16, J15, J31

Suggested Citation

Borghans, Lex and ter Weel, Bas and Weinberg, Bruce A., People Skills and the Labor-Market Outcomes of Underrepresented Groups (April 1, 2014). Industrial and Labor Relations Review, Vol. 67, No. 2, 2014, Available at SSRN: https://ssrn.com/abstract=2425707

Lex Borghans (Contact Author)

Maastricht University - Department of Economics ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands

University of Maastricht - Research Centre for Education and the Labour Market (ROA) ( email )

P.O. Box 616
Maastricht, MD6200
Netherlands

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Bas Ter Weel

University of Amsterdam - SEO Economic Research ( email )

Roetersstraat 29
Amsterdam, 1018 WB
Netherlands

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

Bruce A. Weinberg

Ohio State University (OSU) - Economics ( email )

410 Arps Hall
1945 N. High St.
Columbus, OH 43210-1172
United States
614-292-6701 (Phone)
614-292-3906 (Fax)

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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