Ability, Schooling Inputs and Earnings: Evidence from the NELS
Utilizing the National Educational Longitudinal Study data, this paper examines the role of pre-market cognitive and noncognitive abilities, as well as schooling inputs, on young men’s earnings. In addition to the conditional mean, we estimate the impacts over the earnings distribution using recently developed (instrumental) quantile regression techniques. Our results show that noncognitive ability is an important determinant of earnings, but the effects are not uniform across the distribution. We find noncognitive ability to be most effective for low earners. Cognitive ability, on the other hand, does not yield any impact either at the mean or at the distributional level once we control for educational attainment. We also find that, on average, pupil-teacher ratio is a significant determinant of earnings. However, similar to noncognitive ability, the effects are not homogeneous.
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