Employment tests predict job performance because they measure or are correlated with a large set of malleable developed abilities, which are causally related to productivity. Our economy currently under-rewards the achievements that are measured by these tests. Consequently, economic incentives to study hard in high school are minimal, and this…

This paper presents evidence that recent aptitude test score decline is signaling a significant deterioration in the quality of entering cohorts of workers. The impact of general intellectual achievement (GIA) on productivity; trends in the GIA of the adult populations, students, and working adults; accounting for the labor quality growth when…

Wage rates and earnings give misleading signals to public and private policymakers as to the benefits of certain kinds of education and training investments. These misleading signals result from the fact that (1) workers and employers prefer employment contracts that either do not recognize or only partially recognize differences in productivity…