Cognitive Ability Project

synopsis by Ed Vytlacil

The Cognitive Ability project started in the Spring of 1995, motivated by Herrnstein and Murray's The Bell Curve . Our primary interest is to examine the relationship between measured cognitive abilty and wages in a more serious manner than was done by Herrnstein and Murray. The main researchers on this project are John Cawley , James Heckman , and myself ( Edward Vytlacil ). In addition, Karen Conneely and Lance Lochner also co-authored papers on the project, and additional research was done by Dmitry Hindanov and Jingjing Hsee. We are currently in the final stages of wrapping up the project.

The first two papers from this project examined the meritocracy hypothesis of Herrnstein and Murray. In The Bell Curve, Richard Herrnstein and Charles Murray argue that the U.S. economy is a meritocracy in which differences in wages (including differences across race and gender) are explained by differences in cognitive ability. We examined this hypothesis for the labor market as a whole in "Cognitive Ability, Wages, and Meritocracy," and within occupations in "Meritocracy in America: An Examination of Wages Within and Across Occupations." We show that measured cognitive ability is correlated with wages but explains little of the variance in wages across individuals and time. We also present evidence that cognitive ability is unequally rewarded in the labor market for people of different ethnicity and gender.

"Cognitive Ability, Wages, and Meritocracy" (co-authored with John Cawley , Karen Conneely, and James Heckman ) has just been published in a Springer-Verlag edited volume: Intelligence, Genes and Success: Is it all in the Genes? Scientists Respond to THE BELL CURVE , edited by Bernie Devlin , Stephen E. Fienberg , Daniel Resnick, and Kathryn Roeder . (see the Amazon page for the book). An earlier and more technical version of this paper was published as NBER working paper no. 5645 under the title "Measuring the Effects of Cognitive Ability." The second paper, "Meritocracy in America: An Examination of Wages Within and Across Occupations," (co-authored with John Cawley and James Heckman) is forthcoming in an Industrial Relations special issue on replications of The Bell Curve, being edited by David Levine.

The next two papers from this project examine how the relationship between measured cognitive ability and wages changed during the 1980s, and whether the rise in the return to college education can be attributed to a rise in the return to cognitive ability. "Wages, Ability and Human Capital" (co-authored with John Cawley, James Heckman, Lance Lochner) was presented at the Conference on Meritocracy and Inequality, Sept 26 at the Kennedy School. It is forthcoming in a conference volume edited by Susan Mayer and Paul Peterson - "Cognitive and Social Skills: Sources, Consequences and Trends." "Cognitive Ability and the Rising Wage Return to Education." (co-authored with John Cawley and James Heckman) has been submitted to a journal.

The final paper from the paper is ``A Note On Policies to Reward the Value Added by Educators,'' (co-authored with J. Cawley and J. Heckman), and it is forthcoming in Review of Economics and Statistics, 1999