The returns to cognitive and non-cognitive abilities in Germany

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Germany. The yearly data were first collected from about 12,200 randomly selected adult respondents in West Germany in 1984. After German reunification in 1990, the SOEP was extended by about 4,500 persons from East Germany, and supplemented by expansion samples later on. Information on personality traits is provided mainly in 2005, 4 data on cognitive abilities is given in 2006. In order to include both East and West German individuals, we restrict our sample to the years 1991 to 2006. The final longitudinal sample comprises 13,021 person-year observations from 1,580 employed individuals in working age (20-60 years) for which there is information on both personality traits and cognitive abilities. 5 Measures of cognitive ability Since fully-fletched IQ tests cannot be implemented easily in a large-scale panel survey, two ultra-short tests of cognitive ability were developed for the SOEP (Lang, 2005, Lang et al., 2007), and introduced in 2006: a symbol correspondence test and a word fluency test. Both tests correspond to different modules of the Wechsler Adult Intelligence Scale (WAIS) which altogether comprises 14 modules, seven on verbal IQ and seven on performance IQ (Groth-Marnat, 1997, Kline, 1999). The word fluency test as implemented in the SOEP is similar to a sub-module in the verbal section of the WAIS and has been developed after the animal-naming-task (Lindenberger and Baltes, 1995): Respondents name as many different animals as possible within 90 seconds. The symbol correspondence test (SCT) was developed after the symboldigit-modalities-test (Smith, 1995) and corresponds to a sub-module in the non-verbal section of the WAIS. Using the distinction of fluid and crystallized intelligence (Cattell, 1987), the SCT is conceptually related to the mechanics of cognition or fluid intelligence. It comprises general and largely innate abilities and refers to the performance and speed of 12
solving tasks that are related to new material. The test was implemented asking respondents to match as many numbers and symbols as possible within 90 seconds according to a given correspondence list which is visible to the respondents on a screen. Both tests were previously shown to produce outcomes which are sufficiently correlated with test scores of more comprehensive and well-established intelligence tests (Lang, 2005; Lang et al., 2007). However, we decided to employ the SCT scores only. We do not use test scores from the word fluency test since the nature of this test interferes with the concept of crystallized intelligence inasmuch as factors like for example working memory come into play because of the time constraint. Working memory however is related to executive function and thus to fluid intelligence rather than crystallized intelligence only. Therefore, in order to have a clean measure instead of a mixture of different concepts, we concentrate on the SCT as a pure measure of fluid intelligence. The focus on the SCT is further justified by the word fluency test being more affected by measurement error, as the interviewer has to identify instantly duplicate entries when counting the animal names stated by the respondent Moreover, this approach also allows us to include individuals with migration background who may have insufficient language skills and hence be disadvantaged compared to native speakers when taking the test. Measures of personality The 2005 wave of the SOEP provides several measures of individuals’ personality. First, there are items that relate to the Five Factor Model (McCrae and Costa, 1996; 1999) comprising the five basic psychological dimensions as outlined above: openness to experience, conscientiousness, extraversion, agreeableness, and neuroticism. Since extensive psychological questioning was not feasible in the SOEP, 6 the data provides a set of fifteen items (listed in Table A1 in the Appendix) of which three each are to capture the respective 13
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