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The Relative Economic Importance of Academic, Psychological and Behavioural Attributes Developed on Chilhood

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  • L Feinstein

Abstract

This paper makes use of the substantial information about the psychological and behavioural development of children by age ten in the 1970 Cohort to predict later, economic outcomes, namely qualifications, employment and earnings. It is found that this previously unobserved individual heterogeneity has very substantial implications for the labour market. The returns to education are not significantly reduced by this omission bias but there is evidence of substantial returns to the production of non-academic ability. The paper also finds that different age ten abilities and attributes have implications for different adult outcomes so that human capital production should not be considered by economists as a simple one-dimensional process. Age ten conduct disorder predicts male adult unemployment particularly well but it is self-esteem that predicts male earnings. For women the locus of control variable is particularly important. Finally, whereas age ten maths ability is a good predictor of subsequent educational development for children from high SES families, reading is the stronger predictor for children from low SES groups. The implications of these results for education are developed. Parental attitudes are much more important than raw indices of social class for the explanation of the age ten scores. Schooling curriculum may be important.

Suggested Citation

  • L Feinstein, 2000. "The Relative Economic Importance of Academic, Psychological and Behavioural Attributes Developed on Chilhood," CEP Discussion Papers dp0443, Centre for Economic Performance, LSE.
  • Handle: RePEc:cep:cepdps:dp0443
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    References listed on IDEAS

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    1. David Card, 1994. "Earnings, Schooling, and Ability Revisited," Working Papers 710, Princeton University, Department of Economics, Industrial Relations Section..
    2. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 38(2), pages 112-134.
    3. Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
    4. Robert Haveman & Barbara Wolfe, 1995. "The Determinants of Children's Attainments: A Review of Methods and Findings," Journal of Economic Literature, American Economic Association, vol. 33(4), pages 1829-1878, December.
    5. Feinstein, Leon & Symons, James, 1999. "Attainment in Secondary School," Oxford Economic Papers, Oxford University Press, vol. 51(2), pages 300-321, April.
    6. Francis Green, 1998. "The Value of Skills," Studies in Economics 9819, School of Economics, University of Kent.
    7. repec:fth:prinin:395 is not listed on IDEAS
    8. Goldsmith, Arthur H & Veum, Jonathan R & Darity, William, Jr, 1997. "The Impact of Psychological and Human Capital on Wages," Economic Inquiry, Western Economic Association International, vol. 35(4), pages 815-829, October.
    9. Lorraine Dearden, 1998. "Ability, families, education and earnings in Britain," IFS Working Papers W98/14, Institute for Fiscal Studies.
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    Cited by:

    1. Rooth, Dan-Olof, 2011. "Work out or out of work -- The labor market return to physical fitness and leisure sports activities," Labour Economics, Elsevier, vol. 18(3), pages 399-409, June.
    2. Mónica Hernández-Alava & Gurleen Popli, 2017. "Children’s Development and Parental Input: Evidence From the UK Millennium Cohort Study," Demography, Springer;Population Association of America (PAA), vol. 54(2), pages 485-511, April.
    3. Alan Manning & Joanna Swaffield, 2008. "The gender gap in early-career wage growth," Economic Journal, Royal Economic Society, vol. 118(530), pages 983-1024, July.
    4. Ellen K. Nyhus & Empar Pons, 2012. "Personality and the gender wage gap," Applied Economics, Taylor & Francis Journals, vol. 44(1), pages 105-118, January.
    5. Krishnan, Pramila & Krutikova, Sofya, 2013. "Non-cognitive skill formation in poor neighbourhoods of urban India," Labour Economics, Elsevier, vol. 24(C), pages 68-85.
    6. Gurleen Popli & Aki Tsuchiya, 2014. "Sons and Daughters: Parental Beliefs and Child Behaviour (Evidence from the UK Millennium Cohort Study)," Working Papers 2014013, The University of Sheffield, Department of Economics.

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    Keywords

    Human capital; wages; unemployment; education;

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