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The Labor Market Returns to Cognitive and Noncognitive Ability: Evidence from the Swedish Enlistment

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Author Info

  • Lindqvist, Erik

    ()
    (Research Institute of Industrial Economics (IFN))

  • Westman, Roine

    ()
    (New York University)

Abstract

We use data from the military enlistment for a large representative sample of Swedish men to assess the importance of cognitive and noncognitive ability for labor market outcomes. The measure of noncognitive ability is based on a personal interview conducted by a psychologist. Unlike survey-based measures of noncognitive ability, this measure is a substantially stronger predictor of labor market outcomes than cognitive ability. In particular, we find strong evidence that men who fare badly in the labor market in the sense of long-term unemployment or low annual earnings lack noncognitive but not cognitive ability. We point to a technological explanation for this result. Noncognitive ability is an important determinant of productivity irrespective of occupation or ability level, though it seems to be of particular importance for workers in a managerial position. In contrast, cognitive ability is valuable only for men in qualified occupations. As a result, noncognitive ability is more important for men at the verge of being priced out of the labor market.

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Bibliographic Info

Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 794.

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Length: 58 pages
Date of creation: 26 Mar 2009
Date of revision:
Publication status: Published as Lindqvist, Erik and Roine Vestman, 'The Labor Market Returns to Cognitive and Noncognitive Ability: Evidence from the Swedish Enlistment' in American Economic Journal: Applied Economics, 2011, pages 101-128.
Handle: RePEc:hhs:iuiwop:0794

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Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden
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Related research

Keywords: Personality; Noncognitive ability; Cognitive ability; Intelligence; Human capital;

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  1. Francine D. Blau & Lawrence Kahn, 2004. "Do Cognitive Test Scores Explain Higher U.S. Wage Inequality?," CESifo Working Paper Series 1139, CESifo Group Munich.
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