Employer Demand for Soft Skills: Evidence from Brazil

How much employers value soft skills—and job-seeker perceptions about the returns to these skills—is not well understood. Our research investigates information frictions in soft skills valuation through two questions: (1) What soft skills do employers value most, and how do the valuations compare to technical skills? (2) Can targeted information interventions reduce soft skill mismatches in vocational education?

We focus on the industrial sector in Brazil. Our ongoing partnership with SENAI, Brazil's largest industrial technical training provider, enables us to link restricted RAIS employment data with SENAI student records (2014-2024) to analyze wage disparities. We will conduct a two-stage study beginning with a firm experiment that uses hypothetical jobseeker profiles to quantify employer preferences for specific soft skills.

We will then implement a randomized information intervention with 4,000 vocational students, providing different combinations of information about: (1) their own soft skills profile, (2) employer valuation of soft skills, or (3) both. By measuring belief updating, skill investment decisions, and subsequent labor market outcomes, we will determine whether correcting information frictions increases investment and improves matching efficiency.

This research fills critical gaps in understanding which soft skills matter most in industrial contexts, where skill requirements may differ substantially from white-collar or service sectors. The findings will inform the development of soft-skill training programs within SENAI, suggest pathways to enhance vocational training effectiveness, and potentially offer a scalable, cost-effective approach to improving labor market outcomes across Brazil and elsewhere.