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Institutions, competitiveness and cognitive ability

Author

Listed:
  • Syngjoo Choi

    (Institute for Fiscal Studies)

  • Byung-Yeon Kim

    (Institute for Fiscal Studies)

  • Jungmin Lee

    (Institute for Fiscal Studies and University of Arkansas)

  • Sokbae (Simon) Lee

    (Institute for Fiscal Studies and Columbia University)

Abstract

We investigate whether growing up in a socialist country affects the development of competitiveness by comparing three Korean groups in South Korea, born and raised in three countries with distinct institutional environments: South Korea, North Korea, and China. We examine the effect of home country experiences on competitiveness using laboratory experiments. Results show that North Korean refugees are signi?cantly less competitive than South Koreans or Korean-Chinese immigrants. Ultimately, we ?nd that the lower cognitive ability of North Koreans is a crucial determinant for the de?ciency of competitiveness, while we fail to ?nd evidence for direct effects of social-ist institutions. Analysis through the lens of a choice model with probability weighting uncovers the effects of cognitive ability not only on expected performance but also on subject belief about winning and aversion for competition.

Suggested Citation

  • Syngjoo Choi & Byung-Yeon Kim & Jungmin Lee & Sokbae (Simon) Lee, 2020. "Institutions, competitiveness and cognitive ability," CeMMAP working papers CWP31/20, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
    • Handle: RePEc:ifs:cemmap:31/20
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    More about this item

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • P20 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - General

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