The Growing Importance of Social Skills in the Labor Market

David J. Deming

NBER Working Paper No. 21473
Issued in August 2015, Revised in June 2017
NBER Program(s):Economics of Education, Labor Studies

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 was particularly strong for jobs requiring high levels of both math skill and social skill. 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.

download in pdf format
   (554 K)

email paper

A non-technical summary of this paper is available in the November 2015 NBER Digest.  You can sign up to receive the NBER Digest by email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w21473

Published: David J. Deming, 2017. "The Growing Importance of Social Skills in the Labor Market*," The Quarterly Journal of Economics, vol 132(4), pages 1593-1640. citation courtesy of

Users who downloaded this paper also downloaded* these:
Getmansky Sherman, Lee, and Lo w21449 Hedge Funds: A Dynamic Industry In Transition
Schwerdt, West, and Winters w21509 The Effects of Test-based Retention on Student Outcomes over Time: Regression Discontinuity Evidence from Florida
Schwartz, Leos-Urbel, McMurry, and Wiswall w21470 Making Summer Matter: The Impact of Youth Employment on Academic Performance
Card, Kluve, and Weber w21431 What Works? A Meta Analysis of Recent Active Labor Market Program Evaluations
Guvenen, Kuruscu, Tanaka, and Wiczer w21376 Multidimensional Skill Mismatch
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us