A New Measure of the Cognitive and Noncognitive Components of the Return to Schooling

What is it about schooling that the labor market rewards? This paper shows that when speci\u85cally controlling for schooling cognitive skills (e.g. the capacity to process information and apply knowledge) and not cognitive skills as a whole, close to 70 % of the return to schooling is cognitive. This contrasts with the previous literature that strongly favored noncognitive hypothesis (e.g. behavioral, personality and physical traits). If one believes such results schools are a place where one acquires or is sorted on a knowledge criterion and not a behavioral one. Findings also suggest that cognitive skills acquired in school are more likely to be rewarded than their non-schooling coun-terpart, this is due to signaling. JEL classi\u85cation: I21; J24; J3