Johnny Zetterberg: IFAU - Institute for Labour Market Policy Evaluation, Postal: P O Box 513, SE-751 20 Uppsala, Sweden
Abstract: This paper investigates the impact on earnings of non-cognitive ability, measured in terms of individuals’ 'self-esteem' on earnings. Starting with the pre-market factor approach suggested by Neal & Johnson (1996) a main finding is that measures of relative self-esteem along with cognitive ability are positively correlated with earnings. The analysis also reveals that the returns to cognitive and non-cognitive ability vary over the earnings-distribution: the returns are larger at higher levels of earnings than at low levels. While qualitatively robust, the effects decrease in magnitude when an extended version of the pre-market factor model is used.
42 pages, June 21, 2005
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