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Testing the Validity of Item Non-Response as a Proxy for Cognitive and Non-Cognitive Skills

Sonja de New, Stefanie Schurer () and Felix Leung

No 8874, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Cognitive and non-cognitive skills are important determinants of labor market outcomes, but are often unobserved. We propose a proxy for these skills derived from item non-response information and a procedure to test its validity. Exploiting a unique data-collection feature of an Australian survey, we find that fraction answered on a self-completion questionnaire fulfils all necessary requirements to be a valid proxy for cognitive skills and outperforms alternative proxies derived from paradata. Fraction answered captures a third of the effect of cognitive ability on wages and education. We provide a simple solution to reduce omitted-variable biases by up to 11%.

Keywords: paradata; item non-response; proxy-variable approach; cognitive ability; non-cognitive skills; wages; education (search for similar items in EconPapers)
JEL-codes: J24 C18 C83 I20 J30 (search for similar items in EconPapers)
Pages: 53 pages
Date: 2015-02
New Economics Papers: this item is included in nep-lma and nep-neu
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