Cognitive and socioemotional skills in low-income countries: Measurement and associations with schooling and earnings

We assess the reliability and validity of cognitive and socioemotional skills measures and investigate the correlation between schooling, skills acquisition, and labor earnings. Our primary data from Pakistan incorporate two innovations related to measurement and sampling. With regard to measurement, we developed and implemented a battery of instruments intended to capture cognitive and socioemotional skills among young adults. With regard to sampling, we use a panel that follows respondents from their original rural locations in 2003 to their residences in 2018, a period over which 38% of respondents left their native villages. We first show that in terms of their validity and reliability, our skills measures compare favorably to previous measurement attempts in low- and middle-income countries. We then document that in our data (a) more years of schooling are correlated with higher cognitive and socioemotional skills, (b) labor earnings are correlated with cognitive and socioemotional skills, conditional on years of schooling, and (c) the earnings-skills correlations depend on respondents’ migration status. The magnitude of the correlations between schooling and skills on the one hand and earnings and skills on the other is consistent with a widespread concern that such skills are underproduced in the schooling system.