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The Effects of Cognitive and Noncognitive Abilities on Labor Market Outcomes and Social Behavior

James Heckman, Jora Stixrud and Sergio Urzua

No 12006, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper establishes that a low dimensional vector of cognitive and noncognitive skills explains a variety of labor market and behavioral outcomes. For many dimensions of social performance cognitive and noncognitive skills are equally important. Our analysis addresses the problems of measurement error, imperfect proxies, and reverse causality that plague conventional studies of cognitive and noncognitive skills that regress earnings (and other outcomes) on proxies for skills. Noncognitive skills strongly influence schooling decisions, and also affect wages given schooling decisions. Schooling, employment, work experience and choice of occupation are affected by latent noncognitive and cognitive skills. We study a variety of correlated risky behaviors such as teenage pregnancy and marriage, smoking, marijuana use, and participation in illegal activities. The same low dimensional vector of abilities that explains schooling choices, wages, employment, work experience and choice of occupation explains these behavioral outcomes.

JEL-codes: C31 (search for similar items in EconPapers)
Date: 2006-02
Note: CH ED LS
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Published as Heckman, James J., Jora Stixrud and Sergio Urzua. "The Effects Of Cognitive and Noncognitive Abilities On Labor Market Outcomes and Social Behavior," Journal of Labor Economics, 2006, v24(3,Jul), 411-482.

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