Essays on the Impact of Cognitive and Noncognitive Skills on Labor Market Outcomes
Author: Melinda C.A. Petre
Publisher:
Published: 2014
Total Pages: 298
ISBN-13:
DOWNLOAD EBOOKAnalyzing the distributions of wages for whites, blacks and Hispanics reveals the existence of a wage gap throughout the distribution. There are also clear cognitive and noncognitive skill differences across groups. Do differences in the distributions of these skills explain differences in the distributions of wages? Do predicted distributions of wages resulting from rewarding blacks and Hispanics as if they were white help explain the observed wage gap? Using data from the NLSY79, I look at the impacts of noncognitive skills on wages for blacks, Hispanics and whites. I estimate the entire distribution of wages conditional on skills for blacks and Hispanics to see if there is a difference in wages individuals with the same level of cognitive and noncognitive skills. I find that all cognitive and noncognitive measures examined are important in explaining the wage penalty paid by blacks and Hispanics and that, for blacks, predicting their wages conditional on skills approximates the distribution of actual wages. Do employers recognize noncognitive skills at the onset (interview) or is there a learning process? How does learning about these noncognitive skills occur over time? This paper uses data from the NLSY79 to incorporate measures of noncognitive skills into a model of employer learning described originally by Altonji Pierret (2001). Measures of noncognitive skills include the Rosenberg Self Esteem Score, the Rotter Locus of Internal Control Score, the Coding Speed Score, and the CES-Depression Scale. I find that employers observe an initial signal of self esteem and schooling and that, over time, employers learn about cognitive skills and motivation, placing less emphasis on these initial observations. Does learning transfer perfectly across employers or is there a degree to which learning resets as employees change jobs throughout their careers? In this paper, I use data from the NLSY79 to look for evidence of asymmetric employer learning. I use tests developed by Schonberg (2007) and Pinkston (2009) to look for asymmetric learning in the model from Altonji Pierret (2001) augmented in Petre (2013b) to incorporate noncognitive skills in addition to cognitive skills. I find mixed evidence that learning done by a prior employer might not transfer completely to a new employer.
