| Abstract: |
Most investigations of the importance of and the determinants of adult
cognitive skills assume that (a) they are produced primarily by schooling and
(b) schooling is statistically predetermined. But these assumptions may lead
to misleading inferences about impacts of schooling and of pre-schooling and
post-schooling experiences on adult cognitive skills. This study uses an
unusually rich longitudinal data set collected over 35 years in Guatemala to
investigate production functions for adult (i) reading-comprehension and (ii)
nonverbal cognitive skills as dependent on behaviorally-determined
pre-schooling, schooling and post-schooling experiences. Major results are:
(1) Schooling has significant and substantial impact on adult reading
comprehension (but not on adult nonverbal cognitive skills)—but estimates of
this impact are biased upwards substantially if there are no controls for
behavioral determinants of schooling in the presence of persistent unobserved
factors such as genetic endowments and/or if family background factors that
appear to be correlated with genetic endowments are included among the
first-stage instruments. (2) Both pre-schooling and post-schooling experiences
have substantial significant impacts on one or both of the adult cognitive
skill measures that tend to be underestimated if these pre- and post-schooling
experiences are treated as statistically predetermined—in contrast to the
upward bias for schooling, which suggests that the underlying physical and
job-related components of genetic endowments are negatively correlated with
those for cognitive skills. (3) The failure in most studies to incorporate
pre- and post-schooling experiences in the analysis of adult cognitive skills
or outcomes affected by adult cognitive skills is likely to lead to misleading
over-emphasis on schooling relative to these pre-and post-schooling
experiences. (4) Gender differences in the coefficients of the adult cognitive
skills production functions are not significant, suggesting that most of the
fairly substantial differences in adult cognitive skills favoring males on
average originate from gender differences in schooling attainment and in
experience in skilled jobs favoring males. These four sets of findings are of
substantial interest in themselves. But they also have important implications
for broader literatures, reinforcing the importance of early life investments
in disadvantaged children in determining adult skills and options, pointing to
limitations in the cross-country growth literature of using schooling of
adults to represent human capital, supporting hypotheses about the importance
of childhood nutrition and work complexity in explaining the “Flynn effect” of
substantial increases in measured cognitive skills over time, and questioning
the interpretation of studies that report productivity impacts of cognitive
skills without controlling for the endogeneity of such skills. |