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

Research output: Contribution to journalJournal articleResearchpeer-review

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.

Original languageEnglish
Article number104898
JournalResearch Policy
Volume53
Issue number1
ISSN0048-7333
DOIs
Publication statusPublished - 2024

Bibliographical note

Publisher Copyright:
© 2023 The Authors

    Research areas

  • Artificial intelligence, Automation, Complementarity, Future of work, Human capital, Networks, Skills

ID: 382437325