IDEAS home Printed from https://ideas.repec.org/a/zbw/espost/68493.html
   My bibliography  Save this article

Cognitive Abilities and Earnings – First Evidence for Germany

Author

Listed:
  • Anger, Silke
  • Heineck, Guido

Abstract

We provide first evidence on the relationship between cognitive abilities and earnings in Germany using data from the German Socio-Economic Panel (SOEP) Study. The estimates suggest that mechanics abilities are positively related to wages of West German workers, even when educational attainment is controlled for. Pragmatics of cognition are not related to earnings. In line with studies for other countries, we find that ability and education are inseparable determinants of earnings.

Suggested Citation

  • Anger, Silke & Heineck, Guido, 2010. "Cognitive Abilities and Earnings – First Evidence for Germany," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 17(7), pages 699-702.
    • Handle: RePEc:zbw:espost:68493
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/68493/1/Anger_2010_Cognitive-Abilities-Earnings.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Jeffrey S. Zax & Daniel I. Rees, 2002. "IQ, Academic Performance, Environment, and Earnings," The Review of Economics and Statistics, MIT Press, vol. 84(4), pages 600-616, November.
    2. Patrick Royston, 2004. "Multiple imputation of missing values," Stata Journal, StataCorp LP, vol. 4(3), pages 227-241, September.
    3. Sanders Korenman & Christopher Winship, 1995. "A Reanalysis of The Bell Curve," NBER Working Papers 5230, National Bureau of Economic Research, Inc.
    4. Cameron, Stephen V & Heckman, James J, 1993. "The Nonequivalence of High School Equivalents," Journal of Labor Economics, University of Chicago Press, vol. 11(1), pages 1-47, January.
    5. James J. Heckman & Jora Stixrud & Sergio Urzua, 2006. "The Effects of Cognitive and Noncognitive Abilities on Labor Market Outcomes and Social Behavior," Journal of Labor Economics, University of Chicago Press, vol. 24(3), pages 411-482, July.
    6. Hause, John C, 1971. "Ability and Schooling as Determinants of Lifetime Earnings or If You're So Smart, Why Aren't You Rich?," American Economic Review, American Economic Association, vol. 61(2), pages 289-298, May.
    7. James Heckman & Edward Vytlacil, 2001. "Identifying The Role Of Cognitive Ability In Explaining The Level Of And Change In The Return To Schooling," The Review of Economics and Statistics, MIT Press, vol. 83(1), pages 1-12, February.
    8. Murnane, Richard J & Willett, John B & Levy, Frank, 1995. "The Growing Importance of Cognitive Skills in Wage Determination," The Review of Economics and Statistics, MIT Press, vol. 77(2), pages 251-266, May.
    9. Blackburn, McKinley L & Neumark, David, 1993. "Omitted-Ability Bias and the Increase in the Return to Schooling," Journal of Labor Economics, University of Chicago Press, vol. 11(3), pages 521-544, July.
    10. Cawley, John & Heckman, James & Vytlacil, Edward, 2001. "Three observations on wages and measured cognitive ability," Labour Economics, Elsevier, vol. 8(4), pages 419-442, September.
    11. Bound, John & Griliches, Zvi & Hall, Bronwyn H, 1986. "Wages, Schooling and IQ of Brothers and Sisters: Do the Family Factors Differ?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 27(1), pages 77-105, February.
    12. Bronars, Stephen G. & Oettinger, Gerald S., 2006. "Estimates of the return to schooling and ability: evidence from sibling data," Labour Economics, Elsevier, vol. 13(1), pages 19-34, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Calero, Carla & Gonzalez Diez, Veronica & Soares, Yuri S.D. & Kluve, Jochen & Corseuil, Carlos Henrique, 2017. "Can arts-based interventions enhance labor market outcomes among youth? Evidence from a randomized trial in Rio de Janeiro," Labour Economics, Elsevier, vol. 45(C), pages 131-142.
    2. Elke Lüdemann, 2011. "Schooling and the Formation of Cognitive and Non-cognitive Outcomes," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 39.
    3. Vandenberghe, Vincent, 2019. "Health, Cognition and Work Capacity Beyond the Age of 50," GLO Discussion Paper Series 295, Global Labor Organization (GLO).
    4. Jung, Juergen & Hall, Diane M. Harnek & Rhoads, Thomas, 2013. "Does the availability of parental health insurance affect the college enrollment decision of young Americans?," Economics of Education Review, Elsevier, vol. 32(C), pages 49-65.
    5. Ma. Cecilia Calderón & John Hoddinott, 2011. "The Inter-Generational Transmission of Cognitive Abilities in Guatemala," Research Department Publications 4722, Inter-American Development Bank, Research Department.
    6. Till Kaiser, 2012. "Haben gebildetere Mütter gewissenhaftere Kinder?: Soziale Herkunft und Persönlichkeitsentwicklung im frühkindlichen Alter," SOEPpapers on Multidisciplinary Panel Data Research 509, DIW Berlin, The German Socio-Economic Panel (SOEP).
    7. Carla Calero & Veronica Gonzales & Yuri Soares & Jochen Kluve & Carlos Henrique Corseuilt, 2014. "Can Arts-Based Interventions Enhance Labor Market Outcomes among Youth? Evidence from a Randomized Trial in Rio de Janeiro," Ruhr Economic Papers 0486, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    8. Anger, Silke & Heineck, Guido, 2010. "Do Smart Parents Raise Smart Children? The Intergenerational Transmission of Cognitive Abilities," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 23, pages 1105-1132.
    9. Anger, Silke, 2011. "The Intergenerational Transmission of Cognitive and Non-Cognitive Skills During Adolescence and Young Adulthood," IZA Discussion Papers 5749, Institute of Labor Economics (IZA).
    10. Vincent VANDENBERGHE, 2021. "Health, cognition and work capacity beyond the age of 50: International evidence on the extensive and intensive margins of work," International Labour Review, International Labour Organization, vol. 160(2), pages 271-310, June.
    11. Tushar Bharati & Thea Harpley Green, 2021. "Age at school transition and children’s cognitive and non-cognitive outcomes," Economics Discussion / Working Papers 21-06, The University of Western Australia, Department of Economics.
    12. repec:zbw:rwirep:0486 is not listed on IDEAS
    13. Collischon, Matthias, 2016. "Personality, ability, marriage and the gender wage gap: Evidence from Germany," FAU Discussion Papers in Economics 08/2016, Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics.
    14. Hüttner, Frank & Sunder, Marco, 2011. "Decomposing R2 with the Owen value," Working Papers 100, University of Leipzig, Faculty of Economics and Management Science.
    15. Jessica Ordemann & Friedhelm Pfeiffer, 2022. "The evolution of educational wage differentials for women and men in Germany, from 1996 to 2019," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 56(1), pages 1-12, December.
    16. Janzen, Katrin & Panitz, Robert & Glückler, Johannes, 2022. "Education premium and the compound impact of universities on their regional economy," Research Policy, Elsevier, vol. 51(1).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Heineck, Guido & Anger, Silke, 2010. "The returns to cognitive abilities and personality traits in Germany," Labour Economics, Elsevier, vol. 17(3), pages 535-546, June.
    2. Antoni, Manfred & Heineck, Guido, 2012. "Do literacy and numeracy pay off? : on the relationship between basic skills and earnings," IAB-Discussion Paper 201221, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. Heineck, Guido, 2011. "Do your brains help you out of unemployment?," Economics Letters, Elsevier, vol. 111(1), pages 34-36, April.
    4. Lin, Dajun & Lutter, Randall & Ruhm, Christopher J., 2018. "Cognitive performance and labour market outcomes," Labour Economics, Elsevier, vol. 51(C), pages 121-135.
    5. Galindo-Rueda, Fernando & Vignoles, Anna, 2002. "Class Ridden or Meritocratic? An Economic Analysis of Recent Changes in Britain," IZA Discussion Papers 677, Institute of Labor Economics (IZA).
    6. Nikolov, Plamen & Jimi, Nusrat & Chang, Jerray, 2020. "The Importance of Cognitive Domains and the Returns to Schooling in South Africa: Evidence from Two Labor Surveys," Labour Economics, Elsevier, vol. 65(C).
    7. Calero, Carla & Gonzalez Diez, Veronica & Soares, Yuri S.D. & Kluve, Jochen & Corseuil, Carlos Henrique, 2017. "Can arts-based interventions enhance labor market outcomes among youth? Evidence from a randomized trial in Rio de Janeiro," Labour Economics, Elsevier, vol. 45(C), pages 131-142.
    8. Angel de la Fuente & Antonio Ciccone, 2003. "Human capital in a global and knowledge-based economy," UFAE and IAE Working Papers 562.03, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    9. Magnus Carlsson & Gordon B. Dahl & Björn Öckert & Dan-Olof Rooth, 2015. "The Effect of Schooling on Cognitive Skills," The Review of Economics and Statistics, MIT Press, vol. 97(3), pages 533-547, July.
    10. Janet Currie & Duncan Thomas, 1999. "Early Test Scores, Socioeconomic Status and Future Outcomes," NBER Working Papers 6943, National Bureau of Economic Research, Inc.
    11. Tushar Bharati & Thea Harpley Green, 2021. "Age at school transition and children’s cognitive and non-cognitive outcomes," Economics Discussion / Working Papers 21-06, The University of Western Australia, Department of Economics.
    12. Carla Calero & Veronica Gonzales & Yuri Soares & Jochen Kluve & Carlos Henrique Corseuilt, 2014. "Can Arts-Based Interventions Enhance Labor Market Outcomes among Youth? Evidence from a Randomized Trial in Rio de Janeiro," Ruhr Economic Papers 0486, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    13. Tyler, John H., 2004. "Basic skills and the earnings of dropouts," Economics of Education Review, Elsevier, vol. 23(3), pages 221-235, June.
    14. Silke Anger & Guido Heineck, 2010. "Do smart parents raise smart children? The intergenerational transmission of cognitive abilities," Journal of Population Economics, Springer;European Society for Population Economics, vol. 23(3), pages 1105-1132, June.
    15. Eric A. Hanushek & Ludger Woessmann, 2008. "The Role of Cognitive Skills in Economic Development," Journal of Economic Literature, American Economic Association, vol. 46(3), pages 607-668, September.
    16. repec:zbw:rwirep:0486 is not listed on IDEAS
    17. Flavio Cunha & Fatih Karahan & Ilton Soares, 2011. "Returns to Skills and the College Premium," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 43(s1), pages 39-86, August.
    18. Blázquez, Maite & Herrarte, Ainhoa & Llorente-Heras, Raquel, 2018. "Competencies, occupational status, and earnings among European university graduates," Economics of Education Review, Elsevier, vol. 62(C), pages 16-34.
    19. David J. Deming, 2017. "The Growing Importance of Social Skills in the Labor Market," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 132(4), pages 1593-1640.
    20. Dong, Hao & Otsu, Taisuke & Taylor, Luke, 2022. "Estimation of varying coefficient models with measurement error," Journal of Econometrics, Elsevier, vol. 230(2), pages 388-415.
    21. Bastani, Spencer & Karlsson, Kristina & Waldenström, Daniel, 2023. "The Different Returns to Cognitive Ability in the Labor and Capital Markets," Working Paper Series 1459, Research Institute of Industrial Economics.

    More about this item

    Keywords

    Cognitive abilities; earnings regressions; returns to education; ability bias;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:espost:68493. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/zbwkide.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.