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Noncognitive skills in economics: Models, measurement, and empirical evidence

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  • Thiel, Hendrik
  • Thomsen, Stephan L.

Abstract

There is an increasing economic literature considering personality traits as a source of individual differences in labor market productivity and other outcomes. This paper provides an overview on the role of these skills regarding three main aspects: measurement, development over the life course, and outcomes. Based on the relevant literature from different disciplines, the common psychometric measures used to assess personality are discussed and critical assumptions for their application are highlighted. We sketch current research that aims at incorporating personality traits into economic models of decision making. A recently proposed production function of human capital which takes personality into account is reviewed in light of the findings about life cycle dynamics in other disciplines. Based on these foundations, the main results of the empirical literature regarding noncognitive skills are briefly summarized. Moreover, we discuss common econometric pitfalls that evolve in empirical analysis of personality traits and possible solutions.

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  • Thiel, Hendrik & Thomsen, Stephan L., 2011. "Noncognitive skills in economics: Models, measurement, and empirical evidence," ZEW Discussion Papers 09-076 [rev.], ZEW - Leibniz Centre for European Economic Research.
  • Handle: RePEc:zbw:zewdip:09076r
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    1. Weekly Wisdom Roundup # 57 (Weeklong Reading For The Smarter People)
      by Miguel in Simoleon Sense on 2009-12-21 08:39:20
    2. Non-cognitive skills
      by Kevin Denny in Geary Behaviour Centre on 2009-12-20 22:05:00

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    More about this item

    Keywords

    noncognitive skills; personality; human capital formation; psychometric measures;
    All these keywords.

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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