Must-Read: David Deming: The Growing Importance of Social Skills in the Labor Market: “While computers perform cognitive tasks of rapidly increasing complexity…

…simple human interaction has proven difficult to automate…. [Thus] the labor market increasingly rewards social skills. Since 1980, jobs with high social skill requirements have experienced greater relative growth throughout the wage distribution. Moreover, employment and wage growth has been strongest in jobs that require high levels of both cognitive skill and social skill…. A model of team production… [in which] social skills reduce coordination costs, allowing workers to specialize and trade more efficiently… generat[ing] predictions about sorting and the relative returns to skill across occupations, which I test and confirm using data from the NLSY79. The female advantage in social skills may have played some role in the narrowing of gender gaps in labor market outcomes since 1980.