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Cognitive performance and labour market outcomes

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  • Lin, Dajun
  • Lutter, Randall
  • Ruhm, Christopher J.

Abstract

We use the U.S. National Longitudinal Survey of Youth 1979 and other sources to examine how cognitive performance near the end of secondary schooling relates to labour market outcomes through age fifty. Our preferred estimates control for individual and family backgrounds, non-cognitive attributes, and survey years. We find that returns to cognitive skills rise with age. Although estimated gains in lifetime incomes are close to those reported earlier, our preferred estimates make multiple offsetting improvements. Returns to cognitive skill are greater for blacks and Hispanics than for non-Hispanic whites, both in relative and absolute terms, with gains in work hours being more important than in hourly wages.

Suggested Citation

  • Lin, Dajun & Lutter, Randall & Ruhm, Christopher J., 2018. "Cognitive performance and labour market outcomes," Labour Economics, Elsevier, vol. 51(C), pages 121-135.
  • Handle: RePEc:eee:labeco:v:51:y:2018:i:c:p:121-135
    DOI: 10.1016/j.labeco.2017.12.008
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    Cited by:

    1. Cain Polidano & Chris Ryan, 2017. "What Happens to Students with Low Reading Proficiency at 15? Evidence from Australia," The Economic Record, The Economic Society of Australia, vol. 93(303), pages 600-614, December.

    More about this item

    Keywords

    IQ; Cognitive skills; Work; Lifetime income;

    JEL classification:

    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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