Non - Cognitive Skills , Social Success , and Labor Market Outcomes ∗

This paper models the acquisition of non-cognitive, social skills that are valued in the labor market. Individuals choose whether to participate in costly “social” activities for which the immediate purpose is not the acquisition of marketable skills. Participation, however, generates valuable skills as a by-product. Success at social activities generates additional benefits, depends on non-market abilities, and is limited. We consider two definitions of social success. First, the number of successful participants is fixed. Alternatively, success is relative. Using either definition, the magnitude of labor market inequality that is a consequence of participation in the social activity does not depend on the magnitude of the non-market ability differences. If, however, success is relative, there may exist multiple equilibria with very different welfare consequences. The model also implies that social activities that draw on abilities that are commonly held will induce wider participation and generate higher average wages. ∗Postlewaite gratefully acknowledges support from the National Science Foundation. We thank John Bound, Dan Hamermesh and Muriel Niederle for helpful comments. We thank Philipp Kircher for pointing out an error in an earlier draft.