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How important are the cognitive skills of teenagers in predicting subsequent earnings?

  • Richard J. Murnane

    (Harvard Graduate School of Education; the National Bureau of Economic Research)

  • John B. Willett

    (Harvard Graduate School of Education)

  • Yves Duhaldeborde

    (International Survey Research, London, England)

  • John H. Tyler

    (Department of Education, Brown University)

How important are teenagers' cognitive skills in predicting subsequent labor market success? Do cognitive skills pay off in the labor market only for students who go to college? Does college benefit only students who enter with strong basic skills? These questions are often parts of current policy debates about how to improve the earnings prospects for young Americans. This paper addresses these questions using two longitudinal data sets with earnings information from the mid-1980s and early 1990s. It shows that the same evidence can be used to support the claim that cognitive skills are important determinants of subsequent earnings, and that the effect of cognitive skills is modest. It also shows that while some evidence indicates that college pays off more for students who enter with strong cognitive skills than for students who enter with weaker skills, the bulk of the evidence does not support this conclusion. © 2000 by the Association for Public Policy Analysis and Management.

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Article provided by John Wiley & Sons, Ltd. in its journal Journal of Policy Analysis and Management.

Volume (Year): 19 (2000)
Issue (Month): 4 ()
Pages: 547-568

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Handle: RePEc:wly:jpamgt:v:19:y:2000:i:4:p:547-568
Contact details of provider: Web page: http://www3.interscience.wiley.com/journal/34787/home

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  1. Katz, Lawrence F. & Autor, David H., 1999. "Changes in the wage structure and earnings inequality," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 26, pages 1463-1555 Elsevier.
  2. Henry S. Farber & Robert Gibbons, 1991. "Learning and Wage Dynamics," NBER Working Papers 3764, National Bureau of Economic Research, Inc.
  3. Sanders Korenman & Christopher Winship, 1995. "A Reanalysis of The Bell Curve," NBER Working Papers 5230, National Bureau of Economic Research, Inc.
  4. Joseph G. Altonji & Charles R. Pierret, 1996. "Employer Learning and the Signaling Value of Education," NBER Working Papers 5438, National Bureau of Economic Research, Inc.
  5. Richard J. Murnane & John B. Willett & Frank Levy, 1995. "The Growing Importance of Cognitive Skills in Wage Determination," NBER Working Papers 5076, National Bureau of Economic Research, Inc.
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