Template-Type: ReDIF-Paper 1.0
Title: Cognitive Endurance, Talent Selection, and the Labor Market Returns to Human Capital
Author-Name: Germán Reyes
Author-Email: german.reyes@briq-institute.edu
Classification-JEL: I26, J24, J31, M54
Keywords: Cognitive Endurance; Returns to Education; Human Capital; Wage Level and Structure


Abstract: Cognitive endurance-the capacity to sustain performance on a cognitively-demanding
task over time-is thought to be a crucial productivity determinant. However, a lack
of data on this variable has limited researchers' ability to understand its role for success 
in college and the labor market. This paper uses college-admission-exam records
from 15 million Brazilian high-school students to measure cognitive endurance based
on changes in performance during the exam. By exploiting exogenous variation in
the order of exam questions, I first show that students are significantly more likely
to correctly answer a given question when it appears at the beginning of the test
versus the end. Motivated by this fact, I develop a method to decompose test scores
into fatigue-adjusted ability and cognitive endurance. I then link these measures to
college and employment records to quantify the association between endurance and
long-run outcomes. I find that cognitive endurance has a significant wage return.
Controlling for fatigue-adjusted ability and other student characteristics, an increase
of one standard deviation in endurance predicts a 5.4% wage increase. This wage
return is equivalent to a third of the wage return to fatigue-adjusted ability. I also
document positive associations between endurance and college attendance, college
graduation, firm quality, and other outcomes. Finally, I show that, due to systematic
differences in endurance among students, the exam design can impact income-based
test-score gaps and the informational content of the exam. I discuss the implications
of these findings for designing more informative cognitive assessments to select talent
and more effective interventions to build human capital.



Note: 
Length: 100
Creation-Date: 2023-12
Revision-Date:
File-URL: https://www.crctr224.de/research/discussion-papers/archive/dp490
File-Format: application/pdf
Handle: RePEc:bon:boncrc:CRCTR224_2023_490