ESRC
ECONOMIC
& SOCIAL
RESEARCH
COUNCIL

LEARNING SOCIETY
PROGRAMME

PRINCIPAL
RESEARCHERS

Professor Francis Green University of Kent at Canterbury

Professor David Ashton
and
Dr Alan Felstead

Centre for Labour 
Market Studies
University of Leicester
7-9 Salisbury Road
Leicester  LEl 7QR
Email:  and@le.ac.uk

CONTACT
ADDRESS

Professor Francis Green Department of Economics
Keynes College
University of Kent at Canterbury
Canterbury
Kent  CT2 7NP
Tel:	 01227 827305
Fax:  01227 827734
Email:  gfg@ukc.ac.uk

Duration
36 months

LEARNING, SKILLS AND ECONOMIC REWARDS

OBJECTIVES

The aim was to measure skills used at work by developing new methods, to put these into practice with a survey, and to examine:
a) 	 the association between work skills and education, training and work experience
b)  the impact of skills on pay
c)	 how much skills have been changing since the mid 1980s 
d)	 the distribution pattern of work skills among employed people.

APPROACH

	To develop the new methods, the researchers combined ideas derived from economics, sociology and psychology, drawing on both academic and commercial practices.  The method for measuring skills had to go beyond simply a knowledge of job-holders’ qualifications or their occupational title.  The study adopted the principles of job analysis, as used by occupational psychologists in providing consultancy services to employers, and adapted them so that they could be used in a social survey.
	To put the new method into practice, a survey company was commissioned to question approximately 2,500 individuals in detail about their jobs, through interviews lasting on average 45 minutes.  The sample of respondents was drawn to give a nationally representative picture of Britain’s workforce aged between 20 and 60.
	For broad measures of work skills, the project focused on the qualification level that would be required to get the job, the time taken to learn to do the job well, and the prior training time needed to do the particular type of work.  For particular measures of work skills, the researchers questioned respondents about the importance of many detailed activities that their jobs involved, and grouped the responses into several skill types using statistical procedures.
	The research then used statistical analysis to examine how skills were changing, to investigate how pay was associated with individuals’ skills, and to explore the links with individuals’ prior education, training and work experience.

MAIN FINDINGS

a)	Skills Trends and Patterns
	Skills used in the workplace have increased over the period 1986-1997, modestly, but significantly.  Fewer workers, for example, were in jobs which required less than three months training (57% against 66% at the start of the period) and 29% needed training totaling more than two years compared to 22 % in 1986.
	Virtually all the rise in skills is associated with the increased importance of computers in the workplace.  This does NOT imply that computers are causing all the skills rise, but it does signal the fact that as jobs are being upskilled they are using this new technology.
	Women are much more likely to need some qualification in their jobs - 65% of jobs against 51% in 1986 - whereas for men‘s jobs, the increase was marginal, from 69% to 71%.

a)	The Value of Skills
•	Computer skills are highly valued in the current British labour market.  Even at moderate levels of complexity, for example using word-processing packages, workers using computers earn an average premium (after allowing for a very large range of other factors including the job-holders’ education and training) of around 13%.
•	Professional communication skills (eg making presentations) and problem-solving skills are also highly valued, after allowing for all other factors.

	To a lesser extent, verbal skills also carry a pay premium for women.  However, the skills of communication both with clients and with colleagues have little independent association with pay.
	Numerical skills have a positive link with pay, but once differing levels of computer usage are allowed for, this association disappears.  That is, numerical skills do not carry a return except through their link with computer usage.

c)	   Antecedents of Skills
The study investigated how closely job skills were associated with individuals’ prior education and training, and the importance of certain employers’ policies for skills.  Looking at certain types of skills said to be in high demand - problem-solving, teamworking, professional communication, client communication, and computing skills - the study found that:
	Certain organisational characteristics are strongly associated with the skills used in jobs.  Skills were highest in organisations which had good communications with employees, which encouraged employee involvement, which subscribed to Investors in People and which used Quality Circles.
	Educational qualifications have a differential association with skills.  Higher qualifications are most closely related with computing skills.  They are also closely associated with professional communication skills, and a bit less so with customer communication skills and problem-solving skills.  However, they are not at all associated with teamworking skills.
	Training is positively associated with all types of skills considered, but different forms are linked to different skills.  For example, on-the-job training is associated with greater problem-solving skills, but only off-the-job training is relevant for computing skills and professional communication skills.

POLICY IMPLICATIONS

The study showed that the use of skills in the workplace has increased but changes were by no means rapid.

It will be important to monitor the use as well as the supply of skills as newly qualified college leavers replace older people in the workforce.  Monitoring will be possible now that the skills in use in 1997 have been benchmarked and methods for measuring skills have been developed.  Computer skills need to be increased in breadth and sophistication.  Work-based learning needs to be facilitated as a major route to upgrading skills.  Organisational environments conducive to acquiring the new and vital skills of problem-solving, communicating, team-working and computing need to be encouraged.

KEY PUBLICATIONS

Ashton, D., B. Davies, A. Felstead and F. Green (1999), Work Skills In Britain, Oxford: Centre for Skills, Knowledge and Organisational Performance
Green, F., D. Ashton, B. Burchell, B. Davies and A. Felstead (1999), “Are British Workers Getting More Skilled?” in Borghans, L. and A. de Grip (eds) The Overeducated Worker? The Economics of Skill Utilization, Cheltenham: Edward Elgar
Felstead, A., D.Ashton, B.Burchell and F. Green (1999), “Skill Trends In Britain: Trajectories Over The Last Decade” in F. Coffield (ed) Speaking Truth to Power: Research and Policy on Lifelong Learning, Bristol: Policy Press
Ashton, D. and A. Felstead (1998), Organisational characteristics and skill in Britain. Is there a link?, University of Leicester, Centre for Labour Market Studies, Working Paper No 22
Green, F. (1998), The Value of Skills, Studies in Economics, Number 98/19, University of Kent at Canterbury
Green, F. (1999), The Market Value of Generic Skills, Background Paper, Research Advisory Group for the National Skills Task Force, 1999
Felstead, A., D. Ashton and F. Green (1999), Justice for all? The pattern of skills in Britain, University of Leicester, Centre for Labour Market Studies, Working Paper No. 23