AUTOMATION-SKILL COMPLEMENTARITY: THE CHANGING RETURNS TO SOFT SKILLS IN DIFFERENT STAGES OF TECHNOLOGY ADOPTION

Anastasiia Pustovalova and Priit Vahter

No 146, University of Tartu - Faculty of Economics and Business Administration Working Paper Series from Faculty of Economics and Business Administration, University of Tartu (Estonia)

Abstract: This paper explores the complementarity of automation with social and problem-solving skills, focusing on the wage effects. The results based on detailed firm- and individual-level data from Estonia show that in manufacturing firms which recently adopted automation tools, there is additional wage premium for employees’ social skills. This effect is even more pronounced for the low-skilled workers, emphasizing both the importance of soft skills on low-wage jobs and how innovation at firms can have significant positive effects on some sub-groups of the low-skilled. The role of skills is different depending on how persistent the automation investments are at the firm. First-time automating firms start valuing the social skills first, while persistently automating firms reward the problem-solving skills instead.

Keywords: automation; technological change; social skills; problem-solving skills; wage differentials (search for similar items in EconPapers)
Pages: 38 pages
Date: 2024
New Economics Papers: this item is included in nep-lma, nep-tid and nep-tra
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Persistent link: https://EconPapers.repec.org/RePEc:mtk:febawb:146

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