EconPapers    
Economics at your fingertips  
 

Economic Decision-Making Skill Predicts Income in Two Countries

Andrew Caplin, David Deming, Søren Leth-Petersen and Ben Weidmann

No 31674, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Jobs increasingly require good decision-making. Workers are valued not only for how much they can do, but also for their ability to decide what to do. In this paper we measure the ability to make good decisions about resource allocation, which we call economic decision-making skill. Our assessment requires an intuitive understanding of comparative advantage and is motivated by a model where decision-makers strategically acquire information about factor productivity under time and effort constraints. Economic decision-making skill strongly predicts labor earnings in representative samples of full-time workers in the U.S. and Denmark, conditional on education, IQ, numeracy, and other covariates. Economic decision-making skill is more valuable in management and other decision-intensive occupations.

JEL-codes: D8 J24 (search for similar items in EconPapers)
Date: 2023-09
New Economics Papers: this item is included in nep-hrm and nep-lma
Note: ED EFG LS PR
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.nber.org/papers/w31674.pdf (application/pdf)
Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:31674

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w31674
The price is Paper copy available by mail.

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2025-03-19
Handle: RePEc:nbr:nberwo:31674