Testing the validity of item non-response as a proxy for cognitive and non-cognitive skills

Sonja C. Kassenboehmer; Stefanie Schurer; Felix Leung

Cognitive and non-cognitive skills are important determinants of labor market outcomes, but are often unobserved. We propose a proxy for these skills derived from item non-response information and a procedure to test its validity. Exploiting a unique data-collection feature of an Australian survey, we find that fraction answered on a self-completion questionnaire fulfils all necessary requirements to be a valid proxy for cognitive skills and outperforms alternative proxies derived from paradata. Fraction answered captures a third of the effect of cognitive ability on wages and education. We provide a simple solution to reduce omitted-variable biases by up to 11%.

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Year of publication:	2015
Authors:	New, Sonja C. de ; Schurer, Stefanie ; Leung, Felix
Publisher:	Bonn : IZA
Subject:	paradata \| item non-response \| proxy-variable approach \| cognitive ability \| non-cognitive skills \| wages \| education \| Kognition \| Cognition \| Lohn \| Wages \| Qualifikation \| Occupational qualification \| Bildungsniveau \| Educational achievement \| Deutschland \| Germany \| Schätzung \| Estimation