Economist James Heckman, University of Chicago, links "soft skills" such as perseverance, attention, motivation, and self-confidence to "success in society at large." Heckman argues that investing in socio-cultural skills will provide more "economic and social return" than investing in social programs or infrastructure. Mr. Heckman is a Nobel Prize laureate.
Mr. Heckman advises early intervention for disadvantaged children. His research implies a higher rate of return than equities.
My work with poverty shows that much of the adversity that children in poverty face are exogenous, or out of their control. Such problems as gang violence, economic downturns, a sibling that runs away, or many other factors out of the control of the child.
You know what I haven't heard lately? Wal*Mart bashing. What is the relevance of bringing up Wal*Mart? Because Wal*Mart created millions of jobs for many unskilled laborers. They were then given the tools to become a productive citizen. Seriously, how many of you complain of waiting to checkout at Wal*Mart? That's because Wal*Mart has contributed to the human capital of these workers. So technology created a business model in which unskilled labor could develop their human potential and serve a niche in society that is one of the largest employers in the United States. This is a high return on investment. I believe, on some level, this is what Mr. Heckman is saying.
Like you, I'm a believer in "soft skills." In fact, one of the more significant discussions I had with an economist when I was at the Chicago Fed was about soft skills. He mentioned how hard it was to recruit new research economists. Then he said it wasn't the lack of hard skills. Young economists who could work the numbers and who were familiar with the latest econometric models were a dime a dozen. Rather, he said, it was hard to find people who could speak to groups of different levels, write clearly at different levels, and could work well in groups. He said a good economist with good soft skills was much, much harder to find.
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