nep-neu New Economics Papers
on Neuroeconomics
Issue of 2023‒06‒19
seven papers chosen by

  1. Using Genes to Explore the Relationship of Cognitive and Non-cognitive Skills with Education and Labor Market Outcomes By Buser, Thomas; Ahlskog, Rafael; Johannesson, Magnus; Koellinger, Philipp; Oskarsson, Sven
  2. Temperature and Low-stakes Cognitive Performance By Zhang, Xin; Chen, Xi; Zhang, Xiaobo
  3. How Does Flood Affect Children Differently? The Impact of Flood on Children’s Education, Labor, Food Consumption, and Cognitive Development By Chinh Thi Tuyet Mai; Akira Hibiki
  4. Swallow This: Childhood and Adolescent Exposure to Fast Food Restaurants, BMI, and Cognitive Ability By Sara Sofie Abrahamsson; Aline Bütikofer; Krzysztof Karbownik
  5. Cognitive Skills among Adults: An Impeding Factor for Gender Convergence? By Battisti, Michele; Fedorets, Alexandra; Kinne, Lavinia
  6. The different returns to cognitive ability in the labor and capital markets By Bastani, Spencer; Karlsson, Kristina; Waldenström, Daniel
  7. Personality Traits and Financial Outcomes By Claire Greene; Oz Shy; Joanna Stavins

  1. By: Buser, Thomas (University of Amsterdam); Ahlskog, Rafael (Uppsala University); Johannesson, Magnus (Stockholm School of Economics); Koellinger, Philipp (Vrije Universiteit Amsterdam); Oskarsson, Sven (Uppsala University)
    Abstract: A large literature establishes that cognitive and non-cognitive skills are strongly correlated with educational attainment and professional achievement. Isolating the causal effects of these traits on career outcomes is made difficult by reverse causality and selection issues. We suggest a different approach: instead of using direct measures of individual traits, we use differences between individuals in the presence of genetic variants that are associated with differences in skills and personality traits. Genes are fixed over the life cycle and genetic differences between full siblings are random, making it possible to establish the causal effects of within-family genetic variation. We link genetic data from individuals in the Swedish Twin Registry to government registry data and find evidence for causal effects of genetic differences linked to cognitive skills, personality traits, and economic preferences on professional achievement and educational attainment. Our results also demonstrate that education and labor market outcomes are partially the result of a genetic lottery.
    Keywords: personality traits, economic preferences, cognitive skills, labor markets, education, polygenic indices
    JEL: J24 D91 I26
    Date: 2023–05
  2. By: Zhang, Xin; Chen, Xi; Zhang, Xiaobo
    Abstract: This paper offers one of the first evidence in a developing country context that transitory exposure to high temperatures may disrupt low-stakes cognitive activities across a range of age cohorts. By matching eight years of repeated cognitive tests among all the participants in a nationally representative longitudinal survey in China with weather data according to the exact time and geographic location of their assessment, we show that exposure to a temperature above 32 °C on the test date, relative to a moderate day within 22-24 °C, leads to a sizable decline in their math scores by 0.066 standard deviations (equivalent to 0.23 years of education). Further, the effect on the math test scores is more salient for individuals who are older or less educated.
    Keywords: cognitive performance, high temperatures, adaptation, age gradients
    JEL: I24 Q54 Q51
    Date: 2023
  3. By: Chinh Thi Tuyet Mai; Akira Hibiki
    Abstract: This paper contributes an in-depth study of the short- and long-term effects of floods on the cognitive development of school-aged children. Specifically, we exploit individual-level microdata from a longitudinal study of childhood poverty in Vietnam. Our analyses indicate that floods immediately imposed negative impacts on children’s cognitive skills, but these impacts would be mitigated in the long run. Changes in child schooling, time allocation between school and work, and household food consumption (child nutrition) appear to be potential channels behind these impacts. Girls, older children, firstborn children, and children belonging to ethnic minorities are more vulnerable to the adverse effects of flooding. Our results suggest that policies to alleviate the credit constraints of households in the above groups could mitigate the damage imposed by natural disasters on human capital accumulation.
    Date: 2023–05
  4. By: Sara Sofie Abrahamsson; Aline Bütikofer; Krzysztof Karbownik
    Abstract: Using spatial and temporal variation in openings of fast food restaurants in Norway between 1980 and 2007, we study the effects of changes in the supply of high caloric nutrition on the health and cognitive ability of young adult males. Our results indicate that exposure to these establishments during childhood and adolescence increases BMI and has negative effects on cognition. Heterogeneity analysis does not reveal meaningful differences in the effects across groups, including for those with adverse prenatal health or high paternal BMI, an exception being that cognition is only affected by exposure at ages 0--12 and this effect is mediated by paternal education.
    JEL: I12 I20 J13 L66
    Date: 2023–05
  5. By: Battisti, Michele (University of Glasgow); Fedorets, Alexandra (DIW Berlin); Kinne, Lavinia (Ifo Institute for Economic Research)
    Abstract: While gender differences in labor force participation and wages have been studied extensively, gender gaps in cognitive skills among adults are not yet well understood. Using the PIAAC dataset, this paper presents novel findings on cognitive skill distributions by gender across 34 countries. Despite increasing educational equality, inequalities in numeracy skills favoring men compared to women are pervasive. These skill differences account for a sizable part of the gender wage gap. Furthermore, there are larger disadvantages for women at the top of the wage distribution, which are complemented by lower returns to skills compared to men. We also find that these numeracy-wage patterns are especially pronounced for parents and for those with the highest degree in a non-STEM field of study.
    Keywords: gender wage gap, skills, numeracy, PIAAC
    JEL: I24 J16 J24
    Date: 2023–05
  6. By: Bastani, Spencer (IFAU - Institute for Evaluation of Labour Market and Education Policy); Karlsson, Kristina (Department of Economics, Uppsala University); Waldenström, Daniel (Research Institute of Industrial Economics (IFN))
    Abstract: We investigate the returns to cognitive ability in the labor and capital markets. Using population-wide Swedish military enlistment data and administrative tax records, we find that cognitive ability is much better at predicting capital income than labor earnings. The difference is almost a factor of three and remains substantial even after controlling for education, occupation, savings, inheritance, and parental background. Moreover, ability is significantly positively correlated with wealth returns. Our results provide new insights into why inequality in capital income is greater than in labor income and shed light on the drivers of economic mobility.
    Keywords: Ability; Skills; Education; Capital income; Wealth
    JEL: D31 H20 J24
    Date: 2023–03–31
  7. By: Claire Greene; Oz Shy; Joanna Stavins
    Abstract: The Big Five personality traits—openness to experience, conscientiousness, extroversion, agreeableness, and neuroticism—are widely used in understanding human behavior. Using data collected from a survey and diary of consumer payment choice, we investigate how the Big Five traits affect three financial outcomes: being unbanked, holding a credit card, and carrying credit card debt. Although each personality trait is correlated with each of the financial outcomes we examine, they mostly become statistically insignificant when we control for demographics and income in regressions. Carrying credit card debt (revolving), however, is significantly affected by conscientiousness, openness, and agreeableness: Credit card adopters who are less conscientious, more open to experiences, or more agreeable are significantly more likely to revolve credit card debt. A machine learning algorithm confirms that conscientiousness is the major factor separating revolvers from other credit cardholders.
    Keywords: credit card debt; consumer payments; personality traits; financial behavior; unbanked
    JEL: D12 D14 E42
    Date: 2023–03–01

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