How important are the cognitive skills of teenagers in predicting subsequent earnings?

How important ave teenagers' cognitive skills in predicting subsequent labo r market success' Do cognitive skills pay off in the labor market only for students who go to college? Does college benefit only students who enter wi th strong basic skills' These questions ave often parts of current policy d ebates about how to improve the earnings prospects for young Americans. Thi s paper addresses these questions using two longitudinal data sets with ear nings information from the mid-1980s and early 1990s. It shows that the sam e evidence can be used to support the claim that cognitive skills are impor tant determinants of subsequent earnings, and that the effect of cognitive skills is modest. It also shows that while some evidence indicates that col lege pays off more for students who enter with strong cognitive skills than for students who enter with weaker skills, the bulk of the evidence does M ot support this conclusion. (C) 2000 by the Association for Public Policy A nalysis and Management.