| By: |
Cobb-Clark, Deborah A. (University of Melbourne);
Schurer, Stefanie (Victoria University of Wellington) |
| Abstract: |
Empirical studies of the role of non-cognitive skills in driving economic
behavior often rely heavily on the assumption that these skills are stable
over the relevant time frame. We analyze the change in a specific
non-cognitive skill, i.e. locus of control, in order to directly assess the
validity of this assumption. We find that short- and medium-run changes in
locus of control are rather modest on average, are concentrated among the
young or very old, do not appear to be related to the demographic, labor
market, and health events that individuals experience, and are unlikely to be
economically meaningful. Still, there is no evidence that locus of control is
truly time-invariant implying that the use of lagged measures results in an
errors-in-variables problem that could downward bias the estimated wage return
to locus of control by as much as 50 percent. Those researchers wishing to
analyze the economic consequences of non-cognitive skills should consider (i)
restricting their analysis to the working-age population for whom there is
little evidence of systematic change in skill levels and (ii) accounting for
error in the skill measures they employ. |
| Keywords: |
non-cognitive skills, locus of control, stability, measurement error, endogeneity, life events |
| JEL: |
J24 |
| Date: |
2011–04 |
| URL: |
http://d.repec.org/n?u=RePEc:iza:izadps:dp5630&r=neu |