TY - JOUR

T1 - What is the price of a skill? The value of complementarity

AU - Stephany, Fabian

AU - Teutloff, Ole

N1 - Publisher Copyright: © 2023 The Authors

PY - 2024

Y1 - 2024

N2 - The global workforce is urged to constantly reskill, as technological change favours particular new skills while making others redundant. But which skills are a good investment for workers and firms? As skills are seldomly applied in isolation, we propose that complementarity strongly determines a skill's economic value. For 962 skills, we demonstrate that their value is determined by complementarity – that is, how many different skills, ideally of high value, a competency can be combined with. We show that the value of a skill is relative, as it depends on the skill background of the worker. For most skills, their value is highest when used in combination with skills of a different type. We put our model to the test with a set of skills related to Artificial Intelligence (AI). We find that AI skills are particularly valuable – increasing worker wages by 21 % on average – because of their strong complementarities and their rising demand in recent years. The model and metrics of our work can inform the policy and practice of digital re-skilling to reduce labour market mismatches. In cooperation with data and education providers, researchers and policy makers should consider using this blueprint to provide learners with personalised skill recommendations that complement their existing capacities and fit their occupational background.

AB - The global workforce is urged to constantly reskill, as technological change favours particular new skills while making others redundant. But which skills are a good investment for workers and firms? As skills are seldomly applied in isolation, we propose that complementarity strongly determines a skill's economic value. For 962 skills, we demonstrate that their value is determined by complementarity – that is, how many different skills, ideally of high value, a competency can be combined with. We show that the value of a skill is relative, as it depends on the skill background of the worker. For most skills, their value is highest when used in combination with skills of a different type. We put our model to the test with a set of skills related to Artificial Intelligence (AI). We find that AI skills are particularly valuable – increasing worker wages by 21 % on average – because of their strong complementarities and their rising demand in recent years. The model and metrics of our work can inform the policy and practice of digital re-skilling to reduce labour market mismatches. In cooperation with data and education providers, researchers and policy makers should consider using this blueprint to provide learners with personalised skill recommendations that complement their existing capacities and fit their occupational background.

KW - Artificial intelligence

KW - Automation

KW - Complementarity

KW - Future of work

KW - Human capital

KW - Networks

KW - Skills

U2 - 10.1016/j.respol.2023.104898

DO - 10.1016/j.respol.2023.104898

M3 - Journal article

AN - SCOPUS:85174155916

VL - 53

JO - Research Policy

JF - Research Policy

SN - 0048-7333

IS - 1

M1 - 104898

ER -