Income, Education, and Ability: The Utility of Alternative Measures of Ability

Abstract

This thesis analyzes the effect of innate ability on earnings differentials by using a standard human capital earnings function. The data used is the 1984 panel (Round 6) of the Nation Longitudinal Survey for Youth aged 14 to 21 in 1979. AFQT and Coding Speed (the Armed Services Vocational Aptitude Battery (ASVAB) Form 8A subtest) were examined and compared for the utility of each as a valid ability measure. The primary finding is that, although Coding Speed demonstrated utility as an ability proxy, AFQT functioned much more effectively. While the effect of innate ability by itself on earnings was found to be relatively small, the inclusion of measures of ability in human capital earnings equations substantially reduced the estimates of the returns from education. Keywords: Income, Ability; Human Capital; Innate Ability.

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Document Details

Document Type
Technical Report
Publication Date
Dec 01, 1986
Accession Number
ADA179202

Entities

People

  • Edwin J. Knowles Jr.

Organizations

  • Naval Postgraduate School

Tags

Communities of Interest

  • Biomedical

DTIC Thesaurus Topics

  • Business Administration
  • Classification
  • Data Sets
  • Databases
  • Education
  • Employment
  • Equations
  • Inclusions
  • Labor Markets
  • Mathematics
  • Money
  • Regions
  • Schools
  • Security
  • Standards
  • Statistics
  • Universities

Fields of Study

  • Education

Readers

  • Immunology
  • Naval Personnel Management
  • Psychometric Testing or Psychological Assessment.