What is it About Schooling That the Labor Market Rewards? The
Components of the Return to Schooling AbstractResearch on
determining what it is about schooling that the labor market
rewards is scarce. This paper shows that when speci…cally
controlling for schooling cognitive skills (i.e. the capacity to
process information and apply knowledge) and not cognitive
skills as a whole, a considerable share of the return to
schooling is constituted of cognitive skills. This contrasts
with previous research that strongly favored noncognitive skills
(i.e. behavioral and personality traits) as the key component of
the return to schooling. Results show schools are a place where
one acquires, or is sorted, on a knowledge and a behavioral
criteria in similar shares. Findings also suggest that cognitive
skills acquired in school are considerably more likely to be
rewarded than their non-schooling counterpart. This e¤ect may be
attributed to the signaling value of schooling. Such conclusions
give weight to current policies t