Page 23 - Education and Inclusive Growth --Jong-Wha Lee Korea University

Education and Inclusive Growthc169

instance, unemployment rates of university graduates have been rising in recent

years, while many employers often lament their difficulties in filling vacancies.
Over-educated workers suffer a wage penalty for their surplus schooling. Lee,
Lee and Song (2016) find that the estimated return from an overeducated year

is significantly lower than that from a year of well-matched education in the
Korean labor market.
The skills of the labor force are important for productivity growth and

technological progress. The abundance of skilled workers allows firms and
industries to foster production efficiency and innovation capabilities. Hanushek
and Woessmann (2012) show a strong positive relationship between cognitive

skills and economic growth across nations. Hanushek at al. (2015) report the
positive effects of adult cognitive skills on wages after controlling years of
schooling and other major determinants. In addition, some recent work provides

quantitative evidence for the significant role of noncognitive skills including
motivation, self-esteem. perseverance and acceptance of social norms in
employment and wages (Heckman, Stixrud, and Urzua, 2006).
Recent advances in information and communication technologies (ICTs)

and the acceleration of automation require new type of skills. Robots quickly
replace humans for routine and repetitive tasks. Frey and Osbornes (2017)

estimate that, 47% of the existing jobs in the United States were at risk of
automation. Acemoglu and Restrepo (2017) show that jobs indeed decreased
due to the increased use of robots in the US industries. Workers must learn to
acquire a broad range of skills{ not just technical skill but also non-routine

cognitive and interpersonal skills including the 4Cs (critical thinking, creativity,
collaboration and communication) that cannot be easily replaced by artificial

intelligence (AI) and robots.
Preparing adequate skills for all workers is essential for inclusive