The Labor Market Returns to Cognitive and Noncognitive Ability: Evidence from the Swedish Enlistment
We use data from the military enlistment for a large representative sample of Swedish men to assess the importance of cognitive and noncognitive ability for labor market outcomes. The measure of noncognitive ability is based on a personal interview conducted by a psychologist. Unlike survey-based measures of noncognitive ability, this measure is a substantially stronger predictor of labor market outcomes than cognitive ability. In particular, we find strong evidence that men who fare badly in the labor market in the sense of long-term unemployment or low annual earnings lack noncognitive but not cognitive ability. We point to a technological explanation for this result. Noncognitive ability is an important determinant of productivity irrespective of occupation or ability level, though it seems to be of particular importance for workers in a managerial position. In contrast, cognitive ability is valuable only for men in qualified occupations. As a result, noncognitive ability is more important for men at the verge of being priced out of the labor market.
|Date of creation:||26 Mar 2009|
|Date of revision:|
|Publication status:||Published as Lindqvist, Erik and Roine Vestman, 'The Labor Market Returns to Cognitive and Noncognitive Ability: Evidence from the Swedish Enlistment' in American Economic Journal: Applied Economics, 2011, pages 101-128.|
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- Francine D. Blau & Lawrence M. Kahn, 2001.
"Do Cognitive Test Scores Explain Higher US Wage Inequality?,"
NBER Working Papers
8210, National Bureau of Economic Research, Inc.
- Francine D. Blau & Lawrence M. Kahn, 2005. "Do Cognitive Test Scores Explain Higher U.S. Wage Inequality?," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 184-193, February.
- Francine D. Blau & Lawrence Kahn, 2004. "Do Cognitive Test Scores Explain Higher U.S. Wage Inequality?," CESifo Working Paper Series 1139, CESifo Group Munich.
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