This paper studies how schooling admission tests affect economic performance in an economy where individuals are endowed with both academic and non academic abilities and both abilities matter for labor productivity. We develop a simple model with selective government held schools, where individuals signal their abilities by taking an admission test that sorts them into different schools. When abilities are poorly correlated in the population, as documented in the literature, a standard test based only on academic abilities is expected to be less efficient than a more balanced test, that considers both ability types. Contrary to this expectation, we show that this is not generally true, but depends both on the distribution of abilities in the population and on the marginal contribution of each ability type to individual productivity. It is also not generally true that the outcome of a more balanced test can be replicated by a sequential testing strategy, with government held schools testing academic abilities and firms testing non academic abilities on the sub-sample of graduates of elite schools.
|Date of creation:||Dec 1999|
|Date of revision:|
|Publication status:||published in: Bulletin of Economic Research, 2004, 56 (3), 207-225|
|Contact details of provider:|| Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany|
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org
|Order Information:|| Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany|
When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp76. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak)
If references are entirely missing, you can add them using this form.