Institutions, competitiveness and cognitive ability

Syngjoo Choi, Byung-Yeon Kim, Jungmin Lee and Sokbae (Simon) Lee ()
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Jungmin Lee: Institute for Fiscal Studies and University of Arkansas
Sokbae (Simon) Lee: Institute for Fiscal Studies and Columbia University
Authors registered in the RePEc Author Service: Sokbae (Simon) Lee

No CWP31/20, CeMMAP working papers from Centre for Microdata Methods and Practice, Institute for Fiscal Studies

Abstract: We investigate whether growing up in a socialist country affects the development of competitiveness by comparing three Korean groups in South Korea, born and raised in three countries with distinct institutional environments: South Korea, North Korea, and China. We examine the effect of home country experiences on competitiveness using laboratory experiments. Results show that North Korean refugees are signi?cantly less competitive than South Koreans or Korean-Chinese immigrants. Ultimately, we ?nd that the lower cognitive ability of North Koreans is a crucial determinant for the de?ciency of competitiveness, while we fail to ?nd evidence for direct effects of social-ist institutions. Analysis through the lens of a choice model with probability weighting uncovers the effects of cognitive ability not only on expected performance but also on subject belief about winning and aversion for competition.

Date: 2020-06-24
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Related works:
Working Paper: Institutions, Competitiveness and Cognitive Ability (2020)
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