The Increasing Value of Social Skills

The progress of technology is best measured by our obsolescence: we have a knack for creating machines that are better than us. From self-driving trucks to software that reads MRIs, many of our current jobs will soon be outsourced to our own ingenious inventions.

And yet, even as the robots take over, it’s clear that there are some skills that are still best suited for human beings. We might be irrational, distractible and bad at math, but we are also empathetic, cunning and creative. Robots are smart. We are social.

It’s easy to dismiss these soft skills. Unlike IQ scores, they are hard to quantify. However, according to a new working paper by Per-Anders Edin, Peter Fredriksson, Martin Nybom and Bjorn Ockert, these squishy interpersonal skills are precisely the sort of talents that are most in demand in the 21st century. 

What’s driving this shift? The answer is technological. Before there were computers in our pockets, the most valuable minds excelled at cognitive stuff: they were adept at abstraction and gifted with numbers. But now? Those talents are easily replaced by cheap gadgets and free software. Computation has become a commodity. As a result, so-called non-cognitive skills—a catch-all category that includes everything from teamwork to self-control—are becoming increasingly valuable.

To prove this point, the researchers took advantage of a unique data set: between 1969 and 1994, nearly every Swedish male underwent a battery of psychological tests as part of the enlistment procedure for the military draft. Their cognitive scores were based on four tests measuring reasoning ability, verbal comprehension, spatial ability and technical understanding. Their non-cognitive skills, in contrast, were assessed during a 20-minute interview with a trained psychologist. During the interview, the draftee was scored on dimensions including “social maturity,” perseverance and emotional stability.

The researchers then matched these cognitive and non-cognitive scores to wage data collected by the Swedish government. Among workers in the private sector, they found that the returns to cognitive skills was relatively flat between 1992 and 2013. This jives with related research from the United States labor market, showing that employment growth in “cognitively demanding occupations” slowed down dramatically in the 21st century. 

However, Edin et al. observed the opposite trend when it came to non-cognitive skills. For these Swedish workers, being good at the interpersonal and emotional was increasingly valuable, with the partial return to non-cognitive skills roughly doubling over the same time-period. It’s not that intelligence doesn’t matter. It’s that emotional intelligence matters more.

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According to the economists, one of the reasons non-cognitive skills are becoming more valuable is that they are required for managerial roles.  A good manager doesn’t just issue edicts: he or she must also coordinate workers, placate egos and deal with disagreements. As the economist David Deming noted in his paper, “The Growing Importance of Social Skills in the Labor Market,”  “Such non-routine interaction is at the heart of the human advantage over machines…Reading the minds of others and reacting is an unconscious process, and skill in social settings has evolved in humans over thousands of years.” (Watson might trounce us at chess, but the supercomputer would probably be a terrible boss.) The importance of such non-cognitive skills for management helps explain why the bigger paychecks are going to those with the best social skills.  

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This research inevitably leads back to education. The traditional classroom, after all, has been mostly focused on building up cognitive skills. We drill students on arithmetic and pre-algebra; we ask them to memorize answers and follow the rules; the ultimate measure of one’s education is the SAT, a highly cognitive test. Such talents will always be necessary: even in the age of robots, it’s nice to know your multiplication tables.

However, it’s becoming increasingly clear that our classrooms are preparing students for a workforce that no longer exists. They are being taught the most replaceable skills, drilled on the tasks that computers already perform. (It’s a bit like teaching parchment preparation after Gutenberg.) This trend is only getting worse in the age of standardized tests, which focus classroom time on material that can be easily measured by multiple choice questions. Unfortunately, that’s often the very kind of education that technology has rendered obsolete. If you need to memorize it, then chances are a computer can do it better.

The obvious alternative is for classrooms to follow the money, at least when it comes to the wage returns on non-cognitive skills. We should invest in classrooms that teach students how to work together and handle their feelings, even if such soft skills are harder to assess. What’s more, there’s reason to believe that many of these socio-emotional skills are learned relatively early in life, suggesting that we need to invest in effective pre-school and kindergarten curriculums. (Interventions targeting at-risk parents have also proven effective.) While these enhanced socio-emotional abilities might not translate to improved academic performance, there’s evidence that they remain linked to adult outcomes such as employment, earnings and mental health.

The modern metaphor of the human mind is that it’s a biological computer, three pounds of meaty microchips. But it turns out that the real value of the mind in the 21st century depends on all the ways it’s not like a computer at all. It’s not about how much information we can process, because there’s always a machine that can process more. It’s about how we handle those feelings that only we can feel.

The future belongs to those who play well with others.

Hat tip: Marginal Revolution