Labor market outcomes, cognitive skills, and noncognitive skills in rural China

A growing literature studies how cognitive and noncognitive skills influence labor market outcomes. This paper examines the relationship between childhood cognitive and noncognitive skills and labor market outcomes, using a rich longitudinal data set from rural China to overcome simultaneity concerns. We find that childhood cognitive skills have strong explanatory power for the wages of adults 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 and externalizing behavior. Females are penalized for externalizing behavior while males are rewarded, suggesting the role of gender norms in the labor market.