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American Economic Journal: Applied Economics: Vol. 3 No. 1 (January 2011)

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

Article Citation

Lindqvist, Erik, and Roine Vestman. 2011. "The Labor Market Returns to Cognitive and Noncognitive Ability: Evidence from the Swedish Enlistment." American Economic Journal: Applied Economics, 3(1): 101-28.

DOI: 10.1257/app.3.1.101

Abstract

We use data from the Swedish military enlistment 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. We find strong evidence that men who fare poorly in the labor market—in the sense of unemployment or low annual earnings—lack noncognitive rather than cognitive ability. However, cognitive ability is a stronger predictor of wages for skilled workers and of earnings above the median. (JEL J24, J31, J45)

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Authors

Lindqvist, Erik (Stockholm School of Economics and IFN, Stockholm)
Vestman, Roine (Institute for Financial Research, Stockholm)

JEL Classifications

J24: Human Capital; Skills; Occupational Choice; Labor Productivity
J31: Wage Level and Structure; Wage Differentials
J45: Public Sector Labor Markets

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American Economic Journal: Applied Economics


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