The Labor Market Returns to Cognitive and Noncognitive Ability: Evidence from the Swedish Enlistment

Abstract

We use data from the military enlistment for a large representative sample of Swedish men to assess the importance of cognitive and noncognitive ability for labor market outcomes. The measure of noncognitive ability is based on a personal interview conducted by a psychologist. Unlike survey-based measures of noncognitive ability, this measure is a substantially stronger predictor of labor market outcomes than cognitive ability. In particular, we …nd strong evidence that men who fare badly in the labor market -in the sense of longterm unemployment or low annual earnings -lack noncognitive but not cognitive ability. We point to a technological explanation for this result. Noncognitive ability is an important determinant of productivity irrespective of occupation or ability level, though it seems to be of particular importance for workers in a managerial position. In contrast, cognitive ability is valuable only for men in quali…ed occupations. As a result, noncognitive ability is more important for men at the verge of being priced out of the labor market.

Social Networks, Employee Selection, and Labor Market Outcomes

“…We also show that the data, in general, are less in line with the model when studying recruitments to jobs with a lower skill content. The patterns also suggest that non-cognitive abilities are more relevant for jobs with a low skill content which is well in line with the notion that cognitive skills primarily are linked to productivity within high skilled jobs, and that non-cognitive skills are relatively more important within less skill demanding jobs (see also Lindqvist andVestman (2011) andBrown et al (2012) for similar conclusions).…”

“…As when Burks et al (2013) analyze call centers and truckers, links do not result in entrants with better cognitive or non-cognitive skills in our broad sample of low skilled jobs, although network inbreeding is still present. The results further suggest a notable heterogeneity in the importance of different types of skills along the IFAU -Social networks, employee selection and labor market outcomes 39 lines suggested by Lindqvist and Vestman (2011). In particular, while cognitive skills are a better predictor of linked hires in high-skilled jobs, it is the non-cognitive skills of the incumbent worker that predict the recruitments of linked entrants into low skilled jobs.…”

“…We take this as the starting point since Montgomery-type referral processes are likely to be more relevant for skill intensive jobs (Montgomery (1991)), and since the correlations between productivity and different skill dimensions may depend on job complexity (Lindqvist and Vestman, 2011). We complement these results in Section 6.3 with 13 Data also contain the universe of public sector employees; we include these in a robustness check.…”

Adolescent health and adult labor market outcomes

“…For our empirical analysis, we proceed similarly as for cognitive ability and standardize the non-cognitive ability variable by birth year using all individuals with non-missing data on this variable. Lindqvist and Vestman (2011) have previously shown that both our cognitive and non-cognitive measures strongly predict adult earnings in the population of Swedish males.…”

“…8 See, for example, Ng et al (2001), Ettner et al (1997), Ettner et al (2011), Famulari (1992, Ferrari (1998), Krahn et al (1996), Malone et al (1997), Fanning (1981, and Currie et al (2010). particular this implies an assessment of personal characteristics such as willingness to assume responsibility, independence, outgoing character, persistence, emotional stability and power of initiative (Lindqvist and Vestman 2011). In addition, an important objective of the interview is to identify individuals who are considered particularly unsuited for military service, which includes individuals with antisocial personality disorders, individuals with difficulty accepting authority, individuals with difficulties adjusting to new environments and individuals with violent and aggressive behavior (Andersson and Carlstedt, 2003;Lindqvist and Vestman 2011).…”