Your LinkedIn Skills Say More About Inequality Than You Think
A recent paper by Prof. David Dorn shows that LinkedIn skills reveal more about earnings and gender gaps than educational qualifications or professional experience. Text: David Dorn
Could your LinkedIn profile reveal more about your career potential than your CV? Traditional economic theories argue that education and work experience determine a person’s position in the labor market. But these broad measures only offer a partial view of someone’s human capital, which comprises knowledge, skills, and abilities that drive productivity and earnings.
A recent paper by Prof. David Dorn and his colleagues quantifies human capital by analyzing the self reported skills of nearly nine million U.S. college graduates on LinkedIn. It shows that both the number and composition of reported skills are systematically linked to traditional human capital measures such as education and work experience. Skill growth mirrors earnings, rising quickly early in a career and slowing later in life. Graduates from STEM (science, technology, engineering and mathematics), health and law, as well as those with advanced degrees, are especially likely to report high shares of occupation-specific skills, while those from the arts, humanities or social sciences more often list general skills applicable to many occupations.
A new lens on skills
The findings are clear: skills matter. Workers who list more skills tend to hold better-paid jobs. But not all skills carry the same payoff. Managerial skills such as strategy, planning, budgeting or leadership have particularly high returns, as do specialized skills in medicine, science, IT and law.
Variation in skills explains more of the earnings differences than detailed measures of education or experience. Despite being self-reported and varying in presentation, the study shows that LinkedIn skills explain more of the variation in salaries than traditional metrics.
The gender skill gap
Human capital differences between women and men have long been dismissed as the cause of persistent gender pay gaps. Since women now surpass men in average educational attainment, conventional measures of human capital would suggest women should earn more. Yet analysis of self-reported skills tells a different story. While men and women report similar skill levels upon graduation, women’s skill accumulation slows in their late 20s to early 40s, when reduced work hours due to motherhood limit growth in their reported skills. These differences account for a substantial share of the gender earnings gap.
Multidimensional skill measures thus provide a richer, more actionable view of labor market outcomes than conventional ones. While self-reported LinkedIn skills are imperfect, they offer a timely snapshot of people’s knowledge and abilities – data that employers and researchers use to understand how education, experience, and skills shape inequality.
David Dorn is the UBS Foundation professor of globalization and labor markets at the Department of Economics UZH.
Text: David Dorn, Source: Oec. Mag. #24