nep-neu New Economics Papers
on Neuroeconomics
Issue of 2015‒07‒11
four papers chosen by

  1. Early Maternal Time Investment and Early Child Outcomes By del Bono, Emilia; Francesconi, Marco; Kelly, Yvonne; Sacker, Amanda
  2. Slowed or Sidelined? The Effect of “Normal” Cognitive Decline on Job Performance Among the Elderly By Anek Belbase; Mashfiqur R. Khan; Alicia H. Munnell; Anthony Webb
  3. Robust Predictions under Finite Depth of Reasoning By Kota Murayama
  4. How Does Education Improve Cognitive Skills? Instructional Time versus Timing of Instruction By Sarah Dahmann

  1. By: del Bono, Emilia; Francesconi, Marco; Kelly, Yvonne; Sacker, Amanda
    Abstract: Using large longitudinal survey data from the UK Millennium Cohort Study, this paper estimates the relationship between maternal time inputs and early child development. We find that maternal time is a quantitatively important determinant of skill formation and that its effect declines with child age. There is evidence of long-term effects of early maternal time inputs on later outcomes, especially in the case of cognitive skill development. In the case of non-cognitive development, the evidence of this long-term impact disappears when we account for skill persistence.
    Keywords: Cognitive and non-cognitive skill formation; Early interventions; Education production functions
    JEL: I20 J15 J24
    Date: 2015–07
  2. By: Anek Belbase; Mashfiqur R. Khan; Alicia H. Munnell; Anthony Webb
    Abstract: This paper examines the relationship between age-related cognitive decline and three potential workplace outcomes: 1) coping with increased job difficulty; 2) shifting to a less cognitively demanding job; and 3) retiring early. It uses data from the Health and Retirement Study (HRS) and the O*NET database. Critical components of the analysis are the metric used to measure cognitive decline, inclusion of cognitive reserve as an independent variable, and the use of overlapping 10-year observation windows. A key limitation is that the study cannot conclusively discern a causal relationship between cognitive decline and workforce exit. The paper found that: - About 10 percent of workers between the ages of 55 and 69 experienced steep cognitive decline over a 10-year period. - Workers experiencing steep cognitive decline were more likely to “downshift” to a less demanding job or retire than workers experiencing no cognitive decline. - Workers experiencing steep cognitive decline retired significantly earlier than planned, compared to workers who experienced no change in cognitive ability. - Workers without cognitive reserves were more likely to exit the workforce and retire earlier than planned, compared to workers with cognitive reserves. The policy implications of the findings are: - Cognitive decline might prevent a significant minority of older individuals from working to their planned retirement ages, and thus should be considered when assessing reforms that incent delayed retirement. - Policies that support “downshifting” to a cognitively less demanding job might help workers at risk of steep cognitive decline to remain in the labor force. - Further research is needed to identify whether workers in specific occupations are more susceptible to age-related decline than others, and whether anything can be done to moderate the effect of age-related decline in work ability.
    Date: 2015–06
  3. By: Kota Murayama (Department of Economics, Northwestern University, USA)
    Abstract: When players have a finite depth of reasoning, it is usually assumed that each player has a commonly known anchor behavior. This paper provides a general framework to examine whether predictions are robust to uncertainty about other players' anchors. We give two different sufficient conditions for the robustness. The first condition shows that any p-dominant equilibrium is robust if players put sufficiently small probability (decreasing in p) on high-depth types. This result highlights a distinction between two prominent finite depth of reasoning models: a risk dominated equilibrium is robust in the cognitive hierarchy model, but not in the level-k model. We also show that equilibria of dominance solvable models are robust.
    Keywords: Robustness, Iterative reasoning, Level-k model, Cognitive-hierarchy model, Higher-order belief, Bounded rationality
    Date: 2015–07
  4. By: Sarah Dahmann
    Abstract: This paper investigates two mechanisms through which education may affect cognitive skills in adolescence: the role of instructional quantity and the timing ofinstruction with respect to age. To identify causal effects, I exploit a school reform carried out at the state level in Germany as a quasi-natural experiment: between 2001 and 2007, the academic-track high school (Gymnasium) was reduced by one year in most of Germany's federal states, leaving the overall curriculum unchanged. To investigate the impact of this educational change on students' cognitive abilities, I conduct two separate analyses: first, I exploit the variation in the curriculum taught to same-aged students at academic-track high school over time and across states to identify the effect of the increase in class hours on students' crystallized and fluid intelligence scores. Using rich data on seventeen year-old adolescents from the German Socio-Economic Panel (SOEP) study, the estimates show that fluid intelligence remained unaffected, while crystallized intelligence improved for male students. Second, I compare students' competences in their final year of high school using data from the German National Educational Panel Study (NEPS). The results suggest that students affected by the reform catch up with their non-affected counterparts in terms of their competences by the time of graduation. However, they do not provide any evidence for the timing of instruction to matter in cognitive skill formation. Overall, secondary education therefore seems to impact students'cognitive skills in adolescence especially through instructional time and not so much through age-distinct timing of instruction.
    Keywords: Cognitive Skills, Crystallized Intelligence, Fluid Intelligence, Skill Formation, Education, High School Reform
    JEL: I21 I28 J24
    Date: 2015

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