Abstract: This paper examines the roles of relationship skill and human capital in determining life-cycle outcomes in education, labor, and marriage markets. We find strong empirical evidence of an individual fixed factor that affects both job and marriage separation hazards and extract an index of non-cognitive skill that increases the durability of relationships in marriages and in the labor market. Using this index, we develop and estimate a two-factor life-cycle model of schooling, job search, and marriage. We find that relationship skill can explain about 40% of the persistence in employment turnover and 35% of the persistence in marriage turnover.
Keywords: relationship skill, social skills, search and matching, marriage, occupational sorting, two-factor models, human capital, non-cognitive skills
JEL Classification: D13, J12, J24, J64