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Swedish evidence on the impact of cognitive and non-cognitive ability on earnings – an extended pre-market factor approach

Author

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  • Zetterberg, Johnny

    (IFAU - Institute for Labour Market Policy Evaluation)

Abstract

This 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.

Suggested Citation

  • Zetterberg, Johnny, 2005. "Swedish evidence on the impact of cognitive and non-cognitive ability on earnings – an extended pre-market factor approach," Working Paper Series 2005:16, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    • Handle: RePEc:hhs:ifauwp:2005_016
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    File URL: http://www.ifau.se/upload/pdf/se/2005/wp05-16.pdf
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    References listed on IDEAS

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    Cited by:

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    2. 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.
    3. Uysal, Selver Derya & Pohlmeier, Winfried, 2011. "Unemployment duration and personality," Journal of Economic Psychology, Elsevier, vol. 32(6), pages 980-992.

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    More about this item

    Keywords

    Incentive-influencing preferences; cognitive ability; non-cognitive ability; relative and absolute self-esteem; earnings distribution;
    All these keywords.

    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 - - Personnel Economics - - - Labor Management

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