Empirical Analysis of Skill Possession and Skill Use: Focusing on ICT and English skills

This paper empirically analyzes the relationship between the ICT skills possessed by individuals (ICT skill possession) and the use of ICT at work (ICT skill use) and their wages and job characteristics, using individual data from a web-based survey conducted independently by the Research Institute of Economy, Trade and Industry. The results show that there is a wage premium for both ICT skill possession and ICT skill use; for ICT skill possession, the premium does not necessarily increase as one becomes more advanced, while for ICT skill use, wages increase as skill advances. While there is no uniform relationship between English skill possession and wages, a wage premium is observed for English skill use. The analysis focused on ICT skills, for which the relationship between the use and possession of skills at each level can be determined, and found that the level of ICT skills possessed by individuals matches the level of ICT skills used in the cases of about 78% of all respondents, while about 16% use ICT at work only at a low level relative to the skills they possess. The wage premium increases when the level of ICT skill possession matches the level of ICT skill use at the medium and high levels. The results suggest that it is important for skills to be fully utilized, and that it may be important not only to improve skills, but also to improve the environment in the firms where the skills are held and to implement policies that encourage labor mobility of highly skilled workers so that they can make better use of their skills.