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

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  • Erik Lindqvist
  • Roine Vestman

Abstract

We use data from the Swedish military enlistment 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. We find strong evidence that men who fare poorly in the labor market—in the sense of unemployment or low annual earnings—lack noncognitive rather than cognitive ability. However, cognitive ability is a stronger predictor of wages for skilled workers and of earnings above the median. (JEL J24, J31, J45)

Suggested Citation

  • Erik Lindqvist & Roine Vestman, 2011. "The Labor Market Returns to Cognitive and Noncognitive Ability: Evidence from the Swedish Enlistment," American Economic Journal: Applied Economics, American Economic Association, vol. 3(1), pages 101-128, January.
  • Handle: RePEc:aea:aejapp:v:3:y:2011:i:1:p:101-28
    Note: DOI: 10.1257/app.3.1.101
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    References listed on IDEAS

    as
    1. Francine D. Blau & Lawrence M. Kahn, 2005. "Do Cognitive Test Scores Explain Higher U.S. Wage Inequality?," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 184-193, February.
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    More about this item

    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
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets

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