Cognitive Skills, Strategic Sophistication, and Life Outcomes

Eduardo Fé, David Gill and Victoria Prowse

Journal of Political Economy, 2022, vol. 130, issue 10, 2643 - 2704

Abstract: We investigate how childhood cognitive skills affect strategic sophistication and adult outcomes, and we emphasize the importance of childhood theory of mind. Experimental data show that (i) theory-of-mind ability and cognitive ability both predict level k behavior, (ii) older children respond to information about the cognitive ability of their opponent, and (iii) theory of mind (but not cognitive ability) predicts whether children respond to intentions. Using longitudinal data, we find that childhood theory of mind and cognitive ability are both associated with enhanced adult social skills, higher educational participation, better educational attainment, and lower fertility in young adulthood. Finally, we provide evidence that school spending improves theory of mind.

Date: 2022
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Related works:
Working Paper: Cognitive skills, strategic sophistication, and life outcomes (2021)
Working Paper: Cognitive skills, strategic sophistication, and life outcomes (2021)
Working Paper: Cognitive Skills, Strategic Sophistication, and Life Outcomes (2020)
Working Paper: Cognitive skills, strategic sophistication, and life outcomes (2019)
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