Returns to test scores in Vietnam

Vu, Tien Manh and Yamada, Hiroyuki (2022): Returns to test scores in Vietnam.

Abstract

We examine the returns to test scores from the 2009 Vietnamese National Entrance Examination to University (NEEU) of individuals born in 1991. We investigate their labor outcomes in terms of hourly wage measured in 2018 or 2020. We find that a one standard deviation increase in the standardized test score on the NEEU is associated with a 7–9 percent increase in wage rate 9–11 years later. The results also suggest that mathematics test scores have a significant correlation with wage rate in the long run.

• Item Type: MPRA Paper
• Language: English
• Keywords: Test scores; Cognitive skills; Returns to education; Vietnam
• Subjects: I - Health, Education, and Welfare > I2 - Education and Research Institutions > I26 - Returns to Education; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J23 - Labor Demand; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J24 - Human Capital ; Skills ; Occupational Choice ; Labor Productivity

References

Altonji, G. J., & Pierret, C. R. (2001). Employer learning and statistical discrimination. The Quarterly Journal of Economics, 116(1), 313–350. https://doi.org/10.1162/003355301556329

de Hoyos, R., Estrada, R., & M. J. Vargas. (2021). What do test scores really capture? Evidence from large-scale student assessment in Mexico. World Development, 146, 105524. https://doi.org/10.1016/j.worlddev.2021.105524

Jia, R., & Li, H. (2021). Just above the exam cutoff score: Elite college admission and wages in China. Journal of Public Economics, 196, 104371. https://doi.org/10.1016/j.jpubeco.2021.104371

Kim, S., & Lee, J. (2010). Private tutoring and demand for education in South Korea. Economic Development and Cultural Change, 58(2), 259–296. https://doi.org/10.1086/648186

Lange, F. (2007). The speed of employer learning. Journal of Labor Economics, 25(1), 1–35. https://doi.org/10.1086/508730

Lin, D., Lutter, R., & Ruhm, C. J. (2018). Cognitive performance and labour market outcomes. Labour Economics, 51, 121–135. https://doi.org/10.1016/j.labeco.2017.12.008

Lindqvist, E., & Vestman, R. (2011). The labor market returns to cognitive and noncognitive ability: Evidence from Swedish enlistment. American Economic Journal: Applied Economics, 3, 101–128. https://doi.org/10.1257/app.3.1.101

Murphy, M. K., & Peltzman, S. (2004). School performance and the youth labor market. Journal of Labor Economics, 22(2), 299–327. https://doi.org/10.1086/381251

Nordin, M. (2008). Ability and rates of return to schooling—making use of the Swedish enlistment battery test. Journal of Population Economics, 21, 703–717. https://doi.org/10.1007/s00148-006-0131-6

Oster, E. (2019). Unobservable selection and coefficient stability: Theory and evidence. Journal of Business & Economic Statistics, 37(2), 187–204. https://doi.org/10.1080/07350015.2016.1227711

Sekhri, S. (2020). Prestige matters: Wage premium and value addition in elite colleges. American Economic Journal: Applied Economics, 12(3), 207–225. https://doi.org/10.1257/app.20140105

Vu, T.M. (In press). Effects of heat on mathematics test performance in Vietnam. Asian Economic Journal.

Yuan, C., & Zhang, L. (2015). Public education spending and private substitution in urban China. Journal of Development Economics, 115, 124–139. https://doi.org/10.1016/j.jdeveco.2015.02.006