New Skills Are the High Road to Higher Salaries (IMAGE)
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A research by Jeroma Adda (Bocconi University, Milan) and Christian Dustmann (University College London) show that tasks workers perform can be divided into two categories: routine-manual (RM) tasks, which follow well-defined and repetitive procedures that require a modest amount of training; and cognitive-abstract (CA) tasks, which require more technical and creative capabilities. RM skills contribute more significantly to increases in worker productivity and earnings in the first years of their careers, but once a set of basic skills has been acquired their contribution to wage growth reduces to zero. On the other hand, CA skills take a longer time to be accumulated, and thus take longer to affect earnings, but have a longer-lasting impact, sustained throughout the individuals' career. These differential returns translate to workers in the CA sector earning, on average, higher wages than those in predominantly RM sectors.
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Weiwei Chen
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