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Anyone who is good at using computers or communicating can expect to earn considerably more than their educational qualifications alone would suggest. That is the central conclusion of research by Professor Francis Green and Dr Andy Dickerson, presented at the Royal Economic Society’s Annual Conference.
Their analysis of the 2001 Skills Survey, a nationally representative survey of 4,500 working individuals in Britain aged 20-60 (and compares it with a similar survey of 2,500 individuals in 1997), shows that:
High-level communication skills and computing skills are highly valued in the labour market by employers, whatever people’s formal educational qualifications happen to be. Employees whose jobs involve using computers have been receiving on average a 13% pay premium.
Among computer users, those who raise their computing skills are rewarded yet more. Moving from a job that just requires straightforward computing skills, such as printing out invoices, to one which requires more complex computer usage, such as word-processing or analysing information with a simple statistical package, yields between 6% and 10% more pay. More advanced computing skills get even higher rewards.
Employees who acquire high-level communication skills, such as the ability to make presentations and write reports, also gain higher pay.
Key skills or generic skills, those that are supposed to be useful in all jobs, are now everywhere in the school curriculum and in the mantras of further and higher education. But how much are generic skills being used in the workplace, and how are they valued? Green and Dickerson’s research shows that:
Almost all generic skills are being used more extensively now than in 1997. All types of communication skills are growing, as are planning skills and problem-solving skills, and literacy and numeracy.
Computing skills are being expanded the fastest. In 1997, computers were essential for just over 30% of Britain’s workers, but by 2001, this proportion had increased to 40%. Only about 1 in 5 of us make no use of computers in some way or another at work.
The only generic skills that are being used less and less in the workplace are physical skills such as stamina and strength.
One day, computing skills might become a bit like driving a car: almost everyone learns to do it and nobody pays you more for it. But these findings suggest that the day of satiation has not yet come: anybody who can become good at using computers or at communicating can still expect to be able to command a pay premium in the labour market, beyond what their educational qualifications alone will give them.
Professor Green said:
‘Our study shows the far-reaching influence that new information technologies are having on people at work in Britain. The good news is that, whatever your education has been, people who take on the jobs that require the new skills are getting rewarded with better pay. But workers who do not have access to the new technologies are not doing so well.’
The Growth and Valuation of Generic Skills by Francis Green and Andy Dickerson presented at the Royal Economic Society’s 2003 Annual Conference at the University of Warwick.
Green is Professor of Economics at Keynes College, University of Kent at Canterbury; Dr Dickerson is at the University of Warwick.
The 2001 Skills Survey, which collected information about skills used at work and about workers’ pay and conditions, was commissioned by the Department for Education and Skills from the ESRC Research Centre on Skills, Knowledge and Organisational Performance (SKOPE), based at the Universities of Oxford and Warwick. The survey was carried out by a team directed by Professor Green.
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Economics in Action is a collaboration between the Royal Economic Society, the Economics Network of the Higher Education Academy and SOSIG, the Social Science Information Gateway. It forms part of the Why Study Economics initiative.