Old dogs, it seems, don’t need new tricks. New research from David J. Deming at Harvard’s Wiener Center for Social Policy examines lifetime earnin

The Labor Market Needs the ‘Soft’ Skills Older Workers Have

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2021-05-29 15:30:03

Old dogs, it seems, don’t need new tricks. New research from David J. Deming at Harvard’s Wiener Center for Social Policy examines lifetime earning patterns and shows how the peak earning years have shifted dramatically up the age continuum over the past five decades. This trend has been driven by changes in the mix of skills required in the workforce—away from routinized tasks and toward non-cognitive domains like critical reasoning and decision-making.

The breadth of this shift is difficult to overstate. Between 1960 and 2018, the portion of the nation’s “labor bill” going to management and management-related occupations rose from 15 percent to 32 percent, moving the peak career earnings years from the 30s into the 50s. Deming controls for top executive pay to show this is not a function of the eye-popping salaries of the nation’s elite business leadership but a pervasive workforce reality.

The increasing demand for decision-making skills has several causes, including especially technologically driven reductions in the number of occupations that involve routine tasks and a corresponding rise in the premium for those who can lead and manage workplaces with ever-higher levels of automation. One of the main qualifications for such jobs appears to be the ability to absorb, integrate, and learn from the massive troves of data the modern economy creates.

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