Changes in Skills and Skill Premium for College-Educated Youth

This study examined whether the importance of general skills has relatively increased compared to specific skills, as existing technologies are rapidly becoming obsolete due to the fast development of information technology. It was anticipated that the returns to specific skills might be declining, and the study aimed to empirically verify this trend. The analysis, however, did not find statistical evidence that the returns to specific skills are decreasing over time; rather, there was a possibility that they are actually increasing. These results suggest that the current labor market in Korea may be inadequately prepared for the rapid advancement of information technology. Furthermore, the fact that the returns to specific skills remain high and persistently so may imply that there is excessive focus on short-term profitability, potentially at the expense of fostering talent, transforming the industrial structure, and investing in technological development for long-term sustainability.