Do Cognitive Test Scores Explain Higher U.S. Wage Inequality?

Francine Blau () and Lawrence Kahn

No CESifo Working Paper No. 1139, CESifo Working Paper Series from CESifo Group Munich

Abstract: Using microdata from the 1994-8 International Adult Literacy Survey (IALS) for nine countries, we examine the role of cognitive skills in explaining higher wage inequality in the United States. We find that while the greater dispersion of cognitive test scores in the United States plays a part in explaining higher U.S. wage inequality, higher labor market prices (i.e., higher returns to measured human capital and cognitive performance) and greater residual inequality still play important roles, and are, on average, quantitatively considerably more important than differences in the distribution of test scores in explaining higher U.S. wage inequality.

New Economics Papers: this item is included in nep-ltv
Date: 2004
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Related works:
Working Paper: Do Cognitive Test Scores Explain Higher US Wage Inequality? (2001)
Journal Article: Do Cognitive Test Scores Explain Higher U.S. Wage Inequality? (2005)
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