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Open Access Publications from the University of California

Leadership Skills and Wages


American business is devoting a growing share of resources to identifying and developing a worker characteristic called ³leadership skill². Is there such a thing, and is it rewarded in labor markets? Using the Project Talent, NLS72 and High School and Beyond datasets, we show that men who occupied leadership positions in high school earn more as adults, even when cognitive skills are held constant. The pure leadership-wage effect varies, depending on definitions and time period, from four percent to twenty-four percent, and appears to have increased over time. High-school leaders are more likely to occupy managerial occupations as adults, and leadership skills command a higher wage premium within managerial occupations than in other jobs. We find evidence that leadership skill has a component that is determined before high school, but also find evidence suggesting that it is ³teachable².

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