Prof Satoshi Araki publishes an article on the "skills trap" and unequal wage returns to high skills in European Sociological Review.
3 December 2024
Professor Araki's new paper "Cross-national variation in the skills trap: Illuminating the heterogeneous economic returns to high cognitive skills" has been published in European Sociological Review (https://doi.org/10.1093/esr/jcae048). This article investigates the heterogeneous effects of cognitive skills on earnings from a comparative perspective, using the OECD Survey of Adult Skills data in Britain, the Czech Republic, France, Korea, Norway, and the United States. Employing propensity score matching analysis, Prof Araki shows that (1) higher skills generally contribute to higher earnings, but (2) the effect size varies across people with a different likelihood of obtaining high skills. He also reveals that the observed effect heterogeneity comprises unequal returns across gender and parental education in a way that either intensifies or mitigates existing social inequalities. Based on these results, Prof Araki argues (1) the ‘skills trap’ operates in structurally devaluing high skills among certain groups of people whilst rewarding others; and (2) this trap works variously across societies in accordance with their socio-economic and educational systems. From a methodological viewpoint, he further highlights the importance of investigating effect heterogeneity across both composite propensity scores and their specific components.