IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/5076.html
   My bibliography  Save this paper

The Growing Importance of Cognitive Skills in Wage Determination

Author

Listed:
  • Richard J. Murnane
  • John B. Willett
  • Frank Levy

Abstract

Using data from two longitudinal surveys of American high school seniors, we show that basic cognitive skills had a larger impact on wages for 24-year-old men and women in 1986 than in 1978. For women, the increase in the return to cognitive skills between 1978 and 1986 accounts for all of the increase in the wage premium associated with post-secondary education. We also show that high school seniors' mastery of basic cognitive skills had a much smaller impact on wages two years after graduation than on wages six years after graduation.

Suggested Citation

  • Richard J. Murnane & John B. Willett & Frank Levy, 1995. "The Growing Importance of Cognitive Skills in Wage Determination," NBER Working Papers 5076, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:5076
    Note: LS
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w5076.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Bishop, John Hillman, 1989. "Is the Test Score Decline Responsible for the Productivity Growth Decline?," American Economic Review, American Economic Association, vol. 79(1), pages 178-197, March.
    2. McKinley L. Blackburn & David E. Bloom & Richard B. Freeman, 1989. "The Declining Economic Position of Less-Skilled American Males," NBER Working Papers 3186, National Bureau of Economic Research, Inc.
    3. Thomas J. Kane & Cecilia E. Rouse, 1993. "Labor Market Returns to Two- and Four-Year Colleges: Is a Credit a Credit and Do Degrees Matter?," NBER Working Papers 4268, National Bureau of Economic Research, Inc.
    4. Lillard, Lee A, 1977. "Inequality: Earnings vs. Human Wealth," American Economic Review, American Economic Association, vol. 67(2), pages 42-53, March.
    5. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-442, June.
    6. Bound, John & Griliches, Zvi & Hall, Bronwyn H, 1986. "Wages, Schooling and IQ of Brothers and Sisters: Do the Family Factors Differ?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 27(1), pages 77-105, February.
    7. Thomas J. Kane & Cecilia E. Rouse, 1993. "Labor Market Returns to Two- And Four-Year College: Is a Credit a Credit And Do Degrees Matter?," Working Papers 690, Princeton University, Department of Economics, Industrial Relations Section..
    8. Blackburn, McKinley L & Neumark, David, 1993. "Omitted-Ability Bias and the Increase in the Return to Schooling," Journal of Labor Economics, University of Chicago Press, vol. 11(3), pages 521-544, July.
    9. Thomas J. Kane & Cecilia Rouse, 1993. "Labor Market Returns to Two- And Four-Year College: Is A Credit a Credit And Do Degrees Matter?," Working Papers 690, Princeton University, Department of Economics, Industrial Relations Section..
    10. repec:fth:prinin:311 is not listed on IDEAS
    11. Levy, Frank & Murnane, Richard J, 1992. "U.S. Earnings Levels and Earnings Inequality: A Review of Recent Trends and Proposed Explanations," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1333-1381, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Orley Ashenfelter & Cecilia Rouse, 1998. "Income, Schooling, and Ability: Evidence from a New Sample of Identical Twins," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(1), pages 253-284.
    2. Nikolov, Plamen & Jimi, Nusrat & Chang, Jerray, 2020. "The Importance of Cognitive Domains and the Returns to Schooling in South Africa: Evidence from Two Labor Surveys," Labour Economics, Elsevier, vol. 65(C).
    3. Eric A. Hanushek & Ludger Woessmann, 2008. "The Role of Cognitive Skills in Economic Development," Journal of Economic Literature, American Economic Association, vol. 46(3), pages 607-668, September.
    4. Arias, Omar & McMahon, Walter W., 2001. "Dynamic rates of return to education in the U.S," Economics of Education Review, Elsevier, vol. 20(2), pages 121-138, April.
    5. Tansel, Aysit & Keskin, Halil Ibrahim, 2017. "Education Effects on Days Hospitalized and Days out of Work by Gender: Evidence from Turkey," IZA Discussion Papers 11210, Institute of Labor Economics (IZA).
    6. Burgess, Simon & Lane, Julia & Stevens, David, 1997. "Jobs, Workers and Changes in Earnings Dispersion," CEPR Discussion Papers 1714, C.E.P.R. Discussion Papers.
    7. Philip Oreopoulos & Kjell G. Salvanes, 2009. "How large are returns to schooling? Hint: Money isn't everything," NBER Working Papers 15339, National Bureau of Economic Research, Inc.
    8. Kyui, Natalia, 2016. "Expansion of higher education, employment and wages: Evidence from the Russian Transition," Labour Economics, Elsevier, vol. 39(C), pages 68-87.
    9. Lars Lefgren & Frank McIntyre, 2006. "The Relationship between Women's Education and Marriage Outcomes," Journal of Labor Economics, University of Chicago Press, vol. 24(4), pages 787-830, October.
    10. Stephanie Aaronson, 2002. "The rise in lifetime earnings inequality among men," Finance and Economics Discussion Series 2002-21, Board of Governors of the Federal Reserve System (U.S.).
    11. Rahman, Mustafizur & Al-Hasan, Md., 2018. "Returns to Schooling in Bangladesh Revisited: An Instrumental Variable Quantile Regression Approach," Bangladesh Development Studies, Bangladesh Institute of Development Studies (BIDS), vol. 41(02), pages 27-42, June.
    12. John Giles & Albert Park & Meiyan Wang, 2019. "The Great Proletarian Cultural Revolution, Disruptions to Education, and the Returns to Schooling in Urban China," Economic Development and Cultural Change, University of Chicago Press, vol. 68(1), pages 131-164.
    13. Gensowski, Miriam, 2018. "Personality, IQ, and lifetime earnings," Labour Economics, Elsevier, vol. 51(C), pages 170-183.
    14. Estelle, Sarah M., 2011. "The academic impact on children of maternal post-secondary enrollment," Economics of Education Review, Elsevier, vol. 30(2), pages 353-364, April.
    15. Ishikawa, Mamoru & Ryan, Daniel, 2002. "Schooling, basic skills and economic outcomes," Economics of Education Review, Elsevier, vol. 21(3), pages 231-243, June.
    16. David Card, 1994. "Earnings, Schooling, and Ability Revisited," Working Papers 710, Princeton University, Department of Economics, Industrial Relations Section..
    17. Arendt, Jacob Nielsen, 2008. "In sickness and in health--Till education do us part: Education effects on hospitalization," Economics of Education Review, Elsevier, vol. 27(2), pages 161-172, April.
    18. Martin E Andresen & Martin Huber, 2021. "Instrument-based estimation with binarised treatments: issues and tests for the exclusion restriction," The Econometrics Journal, Royal Economic Society, vol. 24(3), pages 536-558.
    19. David Card, 1993. "Using Geographic Variation in College Proximity to Estimate the Return to Schooling," Working Papers 696, Princeton University, Department of Economics, Industrial Relations Section..
    20. Thomas J. Kane & Cecilia E. Rouse & Douglas Staiger, 1999. "Estimating Returns to Schooling When Schooling is Misreported," Working Papers 798, Princeton University, Department of Economics, Industrial Relations Section..

    More about this item

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:5076. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.