Do Cognitive Test Scores Explain Higher U.S. Wage Inequality?

By Francine D. Blau, Lawrence M. Kahn. Review of Economics and Statistics, 2005

261 citations recorded by the source corpus.

Using microdata from the 19941998 International Adult Literacy Survey for nine countries, we examine the role of cognitive skills in explaining higher wage inequality in the United States. We find that while the greater dispersion of cognitive test scores in the United States plays a part in explaining higher U.S. wage inequality, higher labor market prices (i.e., higher returns to measured human capital and cognitive performance) and greater residual inequality still play important roles, and are, on average, quantitatively considerably more important than differences in the distribution of test scores in explaining higher U.S. wage inequality.

Subfields: Economics and Econometrics, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/ec2220662238873eb22e8bbf774474234fa59eb3

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In Economics and Econometrics

1. Magnus Gustavsson
2. P. Edin
3. E. Leuven
4. Hessel Oosterbeek
5. M. Handel
6. R. Desjardins
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In Sociology and Political Science

1. K. Rubenson
2. Magnus Gustavsson
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5. Hessel Oosterbeek
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8. P. Toner

Citations in the corpus

• Skills Mismatch in the Labor Market (2003, background): “…it might be tempting to conclude that poor quality education is responsible for low U.S. test scores at the bottom, consideration of the native sample suggests that this argument applies only partially to men and perhaps not at all to women” (Blau & Kahn 2001, p. 24; see also Sum et al. 2002).”
• Cross-national Differences in Educational Achievement Inequality (2011, background): “…and Domenech 2008; Castello and Domenech 2002; De Gregorio and Lee 2002), although these are strongly mediated by the characteristics of the labor market and other institutions such as collective bargaining and union membership (Blau and Kahn 2005; Carbonaro 2005, 2006; Devroye and Freeman 2001).”
• Workforce Skills and Innovation: An Overview of Major Themes in the Literature. OECD Education Working Papers, No. 55. (2011, background): “…but it is the case that countries with the largest variation in level of ability in basic skills also have the highest degree of income inequality (Nickell and Layard, 1999; Blau and Kahn, 2003).39 This reflects in part the low productivity of workers with limited assessed cognitive abilities.”
• An Analysis of Skill Mismatch Using Direct Measures of Skills (2011, background): “Blau and Kahn (2001) confirmed this by suggesting that knowledge and skills play a significant role in explaining relatively high US wage inequalities.”
• Labor Market Policy: A Comparative View on the Costs and Benefits of Labor Market Flexibility (2010, unknown): “14 inequality shown in Table 7 (Blau and Kahn 2005).”