Cognitive Ability, Wages, and Meritocracy

John Cawley (), Karen Conneely, James J. Heckman and Edward Vytlacil ()

No 5645, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper presents new evidence from the NLSY on the importance of meritocracy in American society. In it, we find that general intelligence, or g -- a measure of cognitive ability--is dominant in explaining test score variance. The weights assigned to tests by g are similar for all major demographic groups. These results support Spearman's theory of g. We also find that g and other measures of ability are not rewarded equally across race and gender, evidence against the view that the labor market is organized on meritocratic principles. Additional factors beyond g are required to explain wages and occupational choice. However, both blue collar and white collar wages are poorly predicted by g or even multiple measures of ability. Observed cognitive ability is only a minor predictor of social performance. White collar wages are more g loaded than blue collar wages. Many noncognitive factors determine blue collar wages.

JEL-codes: J24 J33 (search for similar items in EconPapers)
Date: 1996-07
Note: LS
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