Cognitive Ability, Wages, and Meritocracy

48 Pages Posted: 24 Sep 1996 Last revised: 14 May 2000

See all articles by John Cawley

John Cawley

Cornell University - College of Human Ecology, Department of Policy Analysis & Management (PAM); Cornell University - College of Arts & Sciences, Department of Economics; The University of Sydney - School of Economics; National University of Ireland, Galway (NUIG) - J.E. Cairnes School of Business & Economics; NBER; IZA

Karen Conneely

Princeton University - Department of Economics

James J. Heckman

University of Chicago - Department of Economics; National Bureau of Economic Research (NBER); American Bar Foundation; Institute for the Study of Labor (IZA); CESifo (Center for Economic Studies and Ifo Institute)

Edward Vytlacil

Yale University - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: July 1996

Abstract

This paper presents new evidence from the NLSY on the importance of meritocracy in American society. In it, we find that general intelligence, or g -- a measure of cognitive ability--is dominant in explaining test score variance. The weights assigned to tests by g are similar for all major demographic groups. These results support Spearman's theory of g. We also find that g and other measures of ability are not rewarded equally across race and gender, evidence against the view that the labor market is organized on meritocratic principles. Additional factors beyond g are required to explain wages and occupational choice. However, both blue collar and white collar wages are poorly predicted by g or even multiple measures of ability. Observed cognitive ability is only a minor predictor of social performance. White collar wages are more g loaded than blue collar wages. Many noncognitive factors determine blue collar wages.

Suggested Citation

Cawley, John and Conneely, Karen and Heckman, James J. and Vytlacil, Edward J., Cognitive Ability, Wages, and Meritocracy (July 1996). NBER Working Paper No. w5645. Available at SSRN: https://ssrn.com/abstract=3469

John Cawley

Cornell University - College of Human Ecology, Department of Policy Analysis & Management (PAM) ( email )

3M24 MVR Hall
Ithaca, NY 14853
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Cornell University - College of Arts & Sciences, Department of Economics ( email )

414 Uris Hall
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The University of Sydney - School of Economics ( email )

Rm 370 Merewether (H04)
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Australia

National University of Ireland, Galway (NUIG) - J.E. Cairnes School of Business & Economics ( email )

Galway
Ireland

NBER

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IZA ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Karen Conneely

Princeton University - Department of Economics ( email )

Princeton, NJ 08544-1021
United States

James J. Heckman (Contact Author)

University of Chicago - Department of Economics ( email )

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Chicago, IL 60637
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773-702-0634 (Phone)
773-702-8490 (Fax)

National Bureau of Economic Research (NBER)

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American Bar Foundation

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Institute for the Study of Labor (IZA)

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Germany

CESifo (Center for Economic Studies and Ifo Institute)

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Munich, DE-81679
Germany

Edward J. Vytlacil

Yale University - Department of Economics ( email )

28 Hillhouse Ave
New Haven, CT 06520-8281
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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