The Path to College Education: The Role of Math and Verbal Skills

This paper studies the formation of math and verbal skills during compulsory education and their impact on adult outcomes. We introduce a novel method to estimate dynamic, nested CES production functions. Using a rich panel database that follows a cohort of students in England from elementary school to university, we find that the production functions of math and verbal skills are inherently different, where cross-effects are only present in the production of math skills. Results on long-term outcomes indicate that verbal skills play a substantially greater role in explaining university enrollment than math skills. This finding, combined with the large female advantage in verbal skills, has key implications for gender gaps in college enrollment and field of study. Finally, we show that students stuck in low quality schools have lower skill levels at the end of compulsory education compared to students attending high quality schools, with these skill deficits leading to a 30 percentage point gap in college enrollment among these students. Simulation results show that about 15% of this gap is due to di erences in skill levels at the beginning of compulsory education while about 20% of this gap is attributable to the differences in school quality, which indicates that policies aiming to improve school quality could help to overcome initial skill disadvantages.