Labor Market Outcomes, Cognitive and Noncognitive Skills in Rural China

Abstract: A growing literature studies how cognitive and noncognitive skills influence labor market outcomes beyond their effects via years of schooling. This paper uses a rich longitudinal data set from rural China to study the relationship between childhood cognitive and noncognitive skills and labor market outcomes. Results show that cognitive skills have strong explanatory power for wages when young adults are in their late 20s, even after controlling for years of education. We also find gender differences in the returns to various noncognitive skills, including internalizing behavior, externalizing behavior, and educational aspirations.