Cognitive Ability, Wages, and Meritocracy

John Cawley, Karen Conneely, James Heckman, Edward Vytlacil

NBER Working Paper No. 5645
Issued in July 1996
NBER Program(s):   LS

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.

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Published: Cawley, John, Karen Conneely, James Heckman, and Edward Vytlacil. "Cognitive Ability, Wages, and Meritocracy." In Intelligence, Genes, and Success: Scientists Respond to The Bell Curve, edited by Bernie Devlin, Stephen Fienberg, Daniel Resnick, and Kathryn Roeder. (Springer Verlag: New York), 1997.

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