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Cognitive Abilities and Earnings – First Evidence for Germany

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  • 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. --

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Bibliographic Info

Article provided by ZBW - German National Library of Economics in its journal EconStor Open Access Articles.

Volume (Year): (2010)
Issue (Month): ()
Pages: 699-702

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Handle: RePEc:zbw:espost:68493

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Keywords: Cognitive abilities; earnings regressions; returns to education; ability bias;

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References

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  1. James Heckman & Edward Vytlacil, 2000. "Identifying the Role of Cognitive Ability in Explaining the Level of and Change in the Return to Schooling," NBER Working Papers 7820, National Bureau of Economic Research, Inc.
  2. 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, University of Chicago Press, vol. 24(3), pages 411-482, July.
  3. Patrick Royston, 2004. "Multiple imputation of missing values," Stata Journal, StataCorp LP, StataCorp LP, vol. 4(3), pages 227-241, September.
  4. Stephen V. Cameron & James J. Heckman, 1991. "The Nonequivalence of High School Equivalents," NBER Working Papers 3804, National Bureau of Economic Research, Inc.
  5. Richard J. Murnane & John B. Willett & Frank Levy, 1995. "The Growing Importance of Cognitive Skills in Wage Determination," NBER Working Papers 5076, National Bureau of Economic Research, Inc.
  6. 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.
  7. Sanders Korenman & Christopher Winship, 1995. "A Reanalysis of The Bell Curve," NBER Working Papers 5230, National Bureau of Economic Research, Inc.
  8. 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, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 27(1), pages 77-105, February.
  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, University of Chicago Press, vol. 11(3), pages 521-44, July.
  10. Bronars, Stephen G. & Oettinger, Gerald S., 2006. "Estimates of the return to schooling and ability: evidence from sibling data," Labour Economics, Elsevier, Elsevier, vol. 13(1), pages 19-34, February.
  11. Cawley, John & Heckman, James & Vytlacil, Edward, 2001. "Three observations on wages and measured cognitive ability," Labour Economics, Elsevier, Elsevier, vol. 8(4), pages 419-442, September.
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Cited by:
  1. Hüttner, Frank & Sunder, Marco, 2011. "Decomposing R2 with the Owen value," Working Papers 100, University of Leipzig, Faculty of Economics and Management Science.
  2. 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, Elsevier, vol. 32(C), pages 49-65.
  3. Silke Anger, 2012. "The Intergenerational Transmission of Cognitive and Non-cognitive Skills during Adolescence and Young Adulthood," SOEPpapers on Multidisciplinary Panel Data Research 473, DIW Berlin, The German Socio-Economic Panel (SOEP).
  4. Elke Lüdemann, 2011. "Schooling and the Formation of Cognitive and Non-cognitive Outcomes," ifo Beiträge zur Wirtschaftsforschung, Ifo Institute for Economic Research at the University of Munich, Ifo Institute for Economic Research at the University of Munich, number 39, 8.
  5. Calero, Carla & Corseuil, Carlos Henrique & Gonzales, Veronica & Kluve, Jochen & Soares, Yuri, 2014. "Can Arts-Based Interventions Enhance Labor Market Outcomes among Youth? Evidence from a Randomized Trial in Rio de Janeiro," IZA Discussion Papers 8210, Institute for the Study of Labor (IZA).
  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).

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