Working Paper No. 794

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

Published: March 26, 2009, revised January 2010Pages: 58Keywords: Personality; Noncognitive ability; Cognitive ability; Intelligence; Human capitalJEL-codes: J21; J24; J31

The Labor Market Returns to Cognitive and Noncognitive Ability: Evidence from the Swedish Enlistment Erik Lindqvist and Roine Vestman

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 find strong evidence that men who fare badly in the labor market ‒ in the sense of long-term 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 qualified occupations. As a result, noncognitive ability is more important for men at the verge of being priced out of the labor market.


Erik Lindqvist


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Sick of Inequality?

An Introduction to the Relationship between Inequality and Health

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In this book Andreas Bergh, Therese Nilsson, IFN and Lund University, and Daniel Waldenström, IFN and Paris School of Economics, France, review the latest research on the relationship between inequality and health. What does inequality mean for our health? Does increasing income inequality affect outcomes such as obesity, life expectancy and subjective well-being?


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