COGNITIVE SKILL, SKILL DEMANDS OF JOBS, AND EARNINGS AMONG YOUNG EUROPEAN-AMERICAN, AFRICAN-AMERICAN, AND MEXICAN-AMERICAN WORKERS

Do the cognitive skills possessed by an individual affect access to mo re cognitively demanding occupations and hence to the associated highe r earnings? To what extent do differences between African Americans, U .S.-born Mexican Americans, and European Americans (Whites) in average cognitive skills account for the lower-skilled jobs and lower earning s of African Americans and Mexican Americans? From analyses of 1991 Na tional Longitudinal Survey (NLSY) data for six groups defined by ethni city and gender, we found that individual cognitive skill level (as as sessed by standardized test scores) affects access to occupations requ iring more cognitive skill, and affects wages levels, even when contro lling for education, work experience, and other factors. Most gf the e ffect of cognitive skills on earnings is direct; a smaller portion is indirect, through access to occupations requiring more cognitive skill . The lower average cognitive skill levels for African Americans and M exican Americans explain a substantial proportion of the earnings gaps between these groups and European Americans. By contrast, cognitive s kills explain none of the gender gap in pay within ethnic groups. We c onclude that to understand or alter racial or ethnic inequalities in e arnings, scholars and policy-makes must attend to social sources of gr oup differences in cognitive skills, such as school, family, and neigh borhood experiences.