Pre-market Abilities, Education, and Employment Outcomes

In this article, we study the connection between skills, educational choices, employment outcomes and wage levels. The study is part of a line of research that examines the role played by both cognitive and non-cognitive abilities in predicting human capital accumulation, as well as individual professional achievement. Moreover, the study integrates the issue of gender differences in labour market participation and wages into the social mobility literature. In particular, this version of the paper contributes to a deeper analysis of the issue of female labour market participation and achievement, taking into account the relationship between pre¬market abilities, investment in education and employment outcomes. Our aim is to understand the extent to which the factors at the origin of inequality and the skills acquired through education can determine females’ occupational choices and professional achievement. In order to achieve our research goal, we propose an empirical model where education, occupational status and wage rates are estimated through a three-stage procedure, where wage rates are corrected for selection into education and employment. This allows us to provide new evidence on the relationship between educational choices, employment outcomes and earnings. The analysis is carried out based on data from the British National Child Development Study (NCDS), a longitudinal study that follows the lives of all individuals living in Great Britain that were born in one particular week of 1958. The dataset allows for the measuring of pre-market cognitive skills as well as non-cognitive skills related to family characteristics, including parents’ preferences and expectations. First estimates show that both cognitive and non-cognitive skills are relevant for educational choices. However, family characteristics, such as parents’ interest in children’s education and parents’ expectations about children’s educational achievement, have a particularly prominent effect on educational outcomes. Our results show, inter alia, that ‘good’ employment outcomes are predetermined by high educational attainment.