Test scores, noncognitive skills and economic growth

Many studies have found a strong association between economic outcomes of nations and their performance on international cognitive tests. This association is often interpreted as evidence for the importance of cognitive skills for economic growth. However, noncognitive skills also affect performance on cognitive tests. Following Borghans and Schils (2012), we exploit exogenous variation in the ordering of questions asked by the Programme for International Student Assessment (PISA) to decompose student performance into two components: the starting performance and the decline in performance during the test. The latter component is interpreted as a measure of noncognitive skills. Students from different countries exhibit differences in performance at the start of the test and in their rates of deterioration in performance during the test. Both components have a positive and statistically significant association with economic growth, and the estimated effects are quite similar and robust. Our results show that noncognitive skills are also important for the relationship between test scores and economic growth.