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Do Cognitive and Noncognitive Skills Explain the Gender Wage Gap in Middle-Income Countries? An Analysis Using STEP Data
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Year: 2016 Publisher: Washington, D.C. : The World Bank,

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Gender-based wage discrimination is a highly researched area of labor economics. However, most studies on this topic have focused on schooling and paid limited attention to the mechanisms through which cognitive and noncognitive skills influence wages. This paper uses data from adults in seven low- and middle-income countries that participated in the STEP Skills Measurement Survey to conduct a comparative analysis of gender wage gaps. The paper uses schooling and skills measures, including reading proficiency and complexity of on-the-job computer tasks to proxy cognitive skills, and personality and behavioral measures to proxy for noncognitive skills in wage decompositions. The analysis finds that years of school explain most of the gender wage gap. The findings also suggest that cognitive and noncognitive skills affect men's and women's earnings in different ways, and that the effects of these skills vary across the wage distribution and between countries.


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Are There Skills Payoffs in Low- and Middle-Income Countries? Empirical Evidence Using STEP Data
Authors: --- --- ---
Year: 2016 Publisher: Washington, D.C. : The World Bank,

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Most research on the economic payoffs of skills has used individuals' level of schooling attained-typically years or level of education or training received-as a key proxy for skills. Such research has consistently found that individual returns to schooling are positive and that returns tend to be higher in low- and middle-income countries than in higher-income countries. However, years in school is only one proxy for skills-are these returns still observed using other measures as proxies? This study uses data from the STEP Skills Measurement Survey to examine the extent to which there is an independent association between cognitive and noncognitive skills and earnings in low- and middle-income countries. The study uses measures of reading proficiency and complexity of on-the-job computer tasks to proxy cognitive skills, and personality and behavioral measures to proxy noncognitive skills. The results demonstrate that even when controlling for schooling and background factors, these skills pay off in the labor market. This is particularly the case for the measures of cognitive skills, while noncognitive skills show some significant, but small, effects on earnings. The findings also suggest that there is significant heterogeneity across countries in how skills are valued in the labor market.


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Skills and the Labor Market in a New Era : Managing the Impacts of Population Aging and Technological Change in Uruguay
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Year: 2020 Publisher: Washington, D.C. : The World Bank,

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Uruguay faces medium- and long-term challenges associated with two global megatrends: population aging and technological change. These two megatrends have been developing for some time, but policy responses have been late or inadequate in many cases. Trying to delay them--by promoting higher fertility or enforcing restrictions on the adoption of new technologies--would probably be ineffective but also ill-advised, as these trends are generating important opportunities to increase production and welfare. The objective of this book is to identify these opportunities, as well as the challenges that population aging and technological change pose for the Uruguayan economy and to determine how they can be addressed through better-designed public policies, with a focus on the development of new skills that increase workers' productivity.


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Educator Knowledge of Early Childhood Development : Evidence from Eastern Nepal
Authors: --- --- --- --- --- et al.
Year: 2020 Publisher: Washington, D.C. : The World Bank,

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Early childhood is a crucial period for the cognitive, social, emotional, physical, and language development of children. Of the 200 million children who do not reach their developmental potential worldwide, 66 percent live in South Asia. This paper explores gaps in knowledge among educators in Eastern Nepal about the importance of early childhood. The results of a survey headteachers and teachers show that teachers often do not place enough weight on the importance of behaviors that contribute to the growth and development of children in early childhood. There are also large gaps in teachers' understanding and practice of classroom accommodations for children with disabilities. The paper illustrates that educators, who play a large role in children's lives during early years, may be uninformed about the importance of early childhood development. The paper provides policy recommendations that can help policymakers target areas that lack understanding and improve early childhood development education and understanding among educators.


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Gender Gaps in Cognitive and Non-Cognitive Skills in Early Primary Grades : Evidence from Rural Indonesia
Authors: --- --- --- --- --- et al.
Year: 2016 Publisher: Washington, D.C. : The World Bank,

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This paper examines gender gaps in cognitive and non-cognitive skills among a sample of more than 10,000 children between the ages of 6 and 9 in rural Indonesia. In terms of cognitive skills, the analysis finds evidence of gender gaps favoring girls at each age in test scores of language (0.158-0.252 standard deviations) and mathematics (0.155-0.243 standard deviations) in the early years of primary school. Girls also perform significantly better than boys in non-cognitive skills, with higher scores on the social competence (0.086-0.247 standard deviations) and emotional maturity domains (0.213-0.296 standard deviations) of the Early Development Instrument, a finding consistent with research from high-income countries. Decomposition analyses are used to investigate the extent to which enrollment patterns in preschool and primary school as well as parenting practices contribute to these gender gaps in cognitive and non-cognitive skills. Standard decomposition approaches are extended to correct for selection on observables. The findings show that gender differences in enrollment patterns play a role in explaining gender gaps in test scores, while differences in parenting practices do not. However, the relative contribution of observed factors to gender gaps depends on the available quality of preschool services in the child's village and whether the outcome of interest is cognitive or non-cognitive skills.


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Cognitive and Non-Cognitive Skills for the Peruvian Labor Market : Addressing Measurement Error through Latent Skills Estimations
Authors: --- ---
Year: 2016 Publisher: Washington, D.C. : The World Bank,

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Evidence from developed country data suggests that cognitive and non-cognitive skills contribute to improved labor market outcomes. This paper tests this hypothesis in a developing country by using an individual-level data set from Peru that incorporates modules to measure cognitive and non-cognitive skills. The paper estimates a structural latent model with unobserved heterogeneity to capture full ability rather than just measured skill. It also applies standard ordinary least squares techniques for comparison. The analysis confirms that cognitive and non-cognitive skills are positively correlated with a range of labor market outcomes in Peru. In particular, cognitive skills positively correlate with wages and the probability of being a wage worker, white-collar, and formal worker, with verbal fluency and numeric ability playing particularly strong roles. The results are robust to methodology. The patterns are less uniform for non-cognitive skills. For instance, perseverance of effort (grit) emerges strongly for most outcomes regardless of methodology. However, plasticity-an aggregation of openness to experience and emotional stability-is only correlated with employment, and only when using the structural latent model. The ordinary least squares method also finds that the disaggregated non-cognitive skills of kindness, cooperation, emotional stability, and openness to experience emerge significantly, mostly for the wage estimates. The different results derived from the ordinary least squares and the structural model with latent skills suggest strong measurement bias in most non-cognitive skills measurement. These findings, although only correlational because of the use of a single cross-section, suggest that recent efforts by the Peruvian government to incorporate non-cognitive skill development into the school curriculum are justified.


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Cognitive and Non-Cognitive Skills for the Peruvian Labor Market : Addressing Measurement Error through Latent Skills Estimations
Authors: --- ---
Year: 2016 Publisher: Washington, D.C. : The World Bank,

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Abstract

Evidence from developed country data suggests that cognitive and non-cognitive skills contribute to improved labor market outcomes. This paper tests this hypothesis in a developing country by using an individual-level data set from Peru that incorporates modules to measure cognitive and non-cognitive skills. The paper estimates a structural latent model with unobserved heterogeneity to capture full ability rather than just measured skill. It also applies standard ordinary least squares techniques for comparison. The analysis confirms that cognitive and non-cognitive skills are positively correlated with a range of labor market outcomes in Peru. In particular, cognitive skills positively correlate with wages and the probability of being a wage worker, white-collar, and formal worker, with verbal fluency and numeric ability playing particularly strong roles. The results are robust to methodology. The patterns are less uniform for non-cognitive skills. For instance, perseverance of effort (grit) emerges strongly for most outcomes regardless of methodology. However, plasticity-an aggregation of openness to experience and emotional stability-is only correlated with employment, and only when using the structural latent model. The ordinary least squares method also finds that the disaggregated non-cognitive skills of kindness, cooperation, emotional stability, and openness to experience emerge significantly, mostly for the wage estimates. The different results derived from the ordinary least squares and the structural model with latent skills suggest strong measurement bias in most non-cognitive skills measurement. These findings, although only correlational because of the use of a single cross-section, suggest that recent efforts by the Peruvian government to incorporate non-cognitive skill development into the school curriculum are justified.


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Assortative Matching in Africa : Evidence from Rural Mozambique, Cote D'ivoire, and Malawi
Authors: --- --- --- ---
Year: 2019 Publisher: Washington, D.C. : The World Bank,

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This paper documents novel evidence of positive assortative matching in African marriage markets along cognitive and socio-emotional skills, time and risk preferences, and education, using data from rural Mozambique, Cote d'Ivoire, and Malawi.


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Do Large-Scale Student Assessments Really Capture Cognitive Skills?
Authors: --- ---
Year: 2021 Publisher: Washington, D.C. : The World Bank,

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This paper studies the relationship between test scores and cognitive skills using two longitudinal data sets that track student performance on a national standardized exam in grades 6, 9, and 12 and post-secondary school outcomes in Mexico. Using a large sample of twins, the analysis finds that primary school test scores are a strong predictor of secondary education outcomes and that this association is mainly driven by the relationship between test scores and cognitive skills, as opposed to family background and other general skills. Using a data set that links results in the national standardized test to later outcomes, the paper finds that secondary school test scores predict university enrollment and hourly wages. These results indicate that, despite their limitations, large-scale student assessments can capture the skills they are meant to measure and can therefore be used to monitor learning in education systems.


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Beyond Qualifications : Returns to Cognitive and Socio-Emotional Skills in Colombia.
Authors: --- ---
Year: 2015 Publisher: Washington, D.C. : The World Bank,

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This paper examines the relationship between individuals' skills and labor market outcomes for the working-age population of Colombia's urban areas. Using a 2012 unique household survey, the paper finds that cognitive skills (aptitudes to perform mental tasks such as comprehension or reasoning) and socio-emotional skills (personality traits and behaviors) matter for favorable labor market outcomes in the Colombian context, although they have distinct roles. Cognitive skills are greatly associated with higher earnings and holding a formal job or a high-qualified occupation. By contrast, socio-emotional skills appear to have little direct influence on these outcomes, but play a stronger role in labor market participation. Both types of skills, especially cognitive skills, are largely associated with pursuing tertiary education. The analysis applies standard econometric techniques as a benchmark and structural estimations to correct for the measurement error of skill constructs.

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