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The Effects of Cognitive and Noncognitive Abilities on Labor Market Outcomes and Social Behavior

Author

Listed:
  • James J. Heckman

    (University of Chicago, University College Dublin, and American Bar Foundation)

  • Jora Stixrud

    (University of Chicago)

  • Sergio Urzua

    (University of Chicago)

Abstract

This article establishes that a low-dimensional vector of cognitive and noncognitive skills explains a variety of labor market and behavioral outcomes. Our analysis addresses the problems of measurement error, imperfect proxies, and reverse causality that plague conventional studies. Noncognitive skills strongly influence schooling decisions and also affect wages, given schooling decisions. Schooling, employment, work experience, and choice of occupation are affected by latent noncognitive and cognitive skills. We show that the same low-dimensional vector of abilities that explains schooling choices, wages, employment, work experience, and choice of occupation explains a wide variety of risky behaviors.

Suggested Citation

  • James J. Heckman & Jora Stixrud & Sergio Urzua, 2006. "The Effects of Cognitive and Noncognitive Abilities on Labor Market Outcomes and Social Behavior," Journal of Labor Economics, University of Chicago Press, vol. 24(3), pages 411-482, July.
    • Handle: RePEc:ucp:jlabec:v:24:y:2006:i:3:p:411-482
    DOI: 10.1086/504455
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    References listed on IDEAS

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    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models

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