Wednesday, March 18, 2009

Using Measures of Non-Cognitive Ability in Economics

Cognitive ability (as measured by test scores) only determines part of a person's success in the labour market. This came into sharp focus in the economics profession at the 2001 meeting of the American Economics Association. At this meeting a number of papers were presented about the importance of non-cognitive ability (also referred to by some authors as 'non-cognitive skills'). An example is Heckman and Rubinstein (2001) who mention non-cognitive skills such as "persistence, reliability and self-discipline". Most often though, the phrasing of "non-cognitive ability" is used, for example: Heckman, Stixrud and Urzua (JLE, 2006): "The Effects of Cognitive and Noncognitive Abilities on Labour Market Outcomes and Social Behavior."

Heckman and Rubinstein (2001) identified the importance of non-cognitive abilities with their observation that high school equivalency recipients earn less than high school graduates despite the fact that the high school equivalency recipients are smarter. They attribute this to the negative non-cognitive attributes of equivalency recipients originally dropping out. Their conclusion is that individuals with higher amounts of persistence and self-discipline may be more likely to attain academic qualifications.

In relation to further evidence, Heckman, Stixrud and Urzua (2006) model the influence of young individuals' cognitive and non-cognitive abilities on schooling and earnings. They find that better non-cognitive abilities lead to more schooling, but also have an earnings return over and above this. Kern and Friedman (2008) de-compose (overall) conscientiousness into a range of non-cognitive abilities, including persistence, industriousness, organisation and discipline (read previous blog discussion on this here).

The trait of conscientiousness is taken from the "Big Five" set of personality characteristics. Kyllonen, Walters and Kaufman (2005) review the literature on noncognitive constructs (such as the "Big Five"), and conclude with a discussion of how non-cognitive constructs (or personality factors) might be used in admissions and guidance applications for graduate education (read previous blog discussion on this here).

Braakmann (2009) has used the German Socio-Economic Panel to show that differences in various non-cognitive traits, specifically the Big Five, contribute to gender inequalities in wages and employment (this was previously mentioned on the blog here). Mueller and Plug (2004) shows that the labour market values conscientiousness and openness to experience for women (previous discussion on the blog here --- in relation to non-cognitive personality, education and earnings).

Kyllonen (2008) is perhaps the most detailed assessment of how to measure non-cognitive abilities; he associates the non-cognitive abilities shown below with the "Big Five" personality traits. Kyllonen is based at the Princeton Educational Testing Service (ETS) and put forward the framework below ("Enhancing Noncognitive Skills to Boost Academic Achievement") at a 2008 Washington conference entitled 'Educational Testing in America: State Assessments, Achievement Gaps, National Policy and Innovations'.

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