NC Commerce

Labor and Economic Analysis Division, Department of Commerce

(919) 707-1500 Location Parking

Skills Research

Is it better to focus efforts on acquiring academic credentials or skills if you’re working toward building a good-paying career? The answer, not surprisingly, is both. But new research by the Department of Commerce’s Labor & Economic Analysis Division, with support by NC State’s Institute for Emerging Issues, gives evidence to the relationship between education, skills, and wages and quantifies their impacts on North Carolina occupations.

How Important Are Skills to Occupational Wages in North Carolina?

We have all heard that more education and more years of experience will lead to jobs in higher paying occupations, and this is true. However, when we control for skills, the wage returns for occupations requiring higher education and experience are reduced by anywhere from a third to two-thirds. This demonstrates that skills are indeed a significant determinant of occupational wages in North Carolina along with educational attainment and experience.

This research also quantifies the linkage between education and skills and highlights the importance of skill development at all education levels. Skills should not be thought of individually, but rather as clusters of interrelated skills. By clustering skills (using an exploratory factor analysis), more can be learned about their importance. The four clusters of skills identified can be categorized as: General skills, Technical skills, Management skills, and “STEM” skills (science, technology, engineering, and math).

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