Swedish evidence on the impact of cognitive and non-cognitive ability on earnings – an extended pre-market factor approach
AbstractThis paper investigates the impact on earnings of non-cognitive ability, measured in terms of individuals’ 'self-esteem' on earnings. Starting with the pre-market factor approach suggested by Neal & Johnson (1996) a main finding is that measures of relative self-esteem along with cognitive ability are positively correlated with earnings. The analysis also reveals that the returns to cognitive and non-cognitive ability vary over the earnings-distribution: the returns are larger at higher levels of earnings than at low levels. While qualitatively robust, the effects decrease in magnitude when an extended version of the pre-market factor model is used.
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Bibliographic InfoPaper provided by IFAU - Institute for Evaluation of Labour Market and Education Policy in its series Working Paper Series with number 2005:16.
Length: 42 pages
Date of creation: 21 Jun 2005
Date of revision:
Incentive-influencing preferences; cognitive ability; non-cognitive ability; relative and absolute self-esteem; earnings distribution;
Find related papers by JEL classification:
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- M54 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Labor Management
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-07-03 (All new papers)
- NEP-BEC-2005-07-03 (Business Economics)
- NEP-CBE-2005-07-03 (Cognitive & Behavioural Economics)
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