Cognitive Endurance, Talent Selection, and the Labor Market Returns to Human Capital

Germán Reyes

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: Cognitive endurance-the capacity to sustain performance on a cognitively-demanding task over time-is thought to be a crucial productivity determinant. However, a lack of data on this variable has limited researchers' ability to understand its role for success in college and the labor market. This paper uses college-admission-exam records from 15 million Brazilian high-school students to measure cognitive endurance based on changes in performance during the exam. By exploiting exogenous variation in the order of exam questions, I first show that students are significantly more likely to correctly answer a given question when it appears at the beginning of the test versus the end. Motivated by this fact, I develop a method to decompose test scores into fatigue-adjusted ability and cognitive endurance. I then link these measures to college and employment records to quantify the association between endurance and long-run outcomes. I find that cognitive endurance has a significant wage return. Controlling for fatigue-adjusted ability and other student characteristics, an increase of one standard deviation in endurance predicts a 5.4% wage increase. This wage return is equivalent to a third of the wage return to fatigue-adjusted ability. I also document positive associations between endurance and college attendance, college graduation, firm quality, and other outcomes. Finally, I show that, due to systematic differences in endurance among students, the exam design can impact income-based test-score gaps and the informational content of the exam. I discuss the implications of these findings for designing more informative cognitive assessments to select talent and more effective interventions to build human capital.

Keywords: Cognitive Endurance; Returns to Education; Human Capital; Wage Level and Structure (search for similar items in EconPapers)
JEL-codes: I26 J24 J31 M54 (search for similar items in EconPapers)
Pages: 100
Date: 2023-12
New Economics Papers: this item is included in nep-lma and nep-neu
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