This analysis helps to inform policy choices by disentangling the contributions of average skill levels, how skills are distributed across the workforce, the extent to which skills are used on the job, and the return they command on the labour market. The chapter also shows that putting skills to better use can help reduce wage inequality, by strengthening the links between workers’ skills, productivity and wages. These findings provide important insights into the role that skills policies can play within a comprehensive policy strategy to reduce wage inequality.