Returns to cognitive and non-cognitive skills: evidence for Mexico

ABSTRACT

This study examines how cognitive and non-cognitive skills are valued in the labour market in Mexico. It uses a novel dataset which includes a wide array of cognitive and non-cognitive skill measures. Non-cognitive skills are rewarded in the market even after controlling for family background and educational attainment. Returns to non-cognitive skills are similar between men and women. However, controlling for educational attainment and family background, only men are rewarded for their cognitive skills.

KEYWORDS:

• Skills
• returns
• cognitive
• non-cognitive
• wages
• Mexico

JEL CLASSIFICATION:

• D31
• D63
• J24
• J3
• O54

Acknowledgement

This work was supported by the Sectorial Fund for Research on Social Development of the Mexican National Council on Science and Technology (CONACyT) and the Secretary of Social Development (Project No. 217909). I also wish to thank the Espinosa Yglesias Research Center for financing a research assistant and a roundtable with academics to discuss the survey I carried out, and Cristobal Domínguez for excellent research assistance. I also thank the anonymous reviewers for their many insightful comments and suggestions. Any errors or omissions are solely my responsibility.

Disclosure statement

No potential conflict of interest was reported by the author.

Supplemental data

Supplemental data for this article can be accessed here.

Notes

¹ According to the 2015 census, 41% of adults aged 30–60 years and 52% of those aged 40–50 years live in households with at least one person aged 12–18 years. Because the sample is restricted mainly to parents living with their teenage children, these results should be interpreted with caution.

² The wealth index was obtained from a principal component analysis using questions related to household characteristics when the interviewee was 14 years old (assets like refrigerator, water heater, full bathroom, availability of electricity and sewage, demographic dependence, and a measure of overcrowding in the household) as well as the educational level of the interviewee’s parents.

³ The Online Appendix includes regressions separating the locus of control and each component of the Big Five. For women, the important non-cognitive skills are locus of control (6%) and extraversion (9%); for men, only conscientiousness is important (8%).

Additional information

Funding

This work was supported by the Sectorial Fund for Research on Social Development of the Mexican National Council on Science and Technology (CONACyT) and the Secretary of Social Development [Project No. 217909].