The Economic Value of Childhood Socio-Emotional Skills

We examine the relationship between childhood socio-emotional skills and labour market outcomes using the 1970 British Cohort Study. A new factorization of teacher assessments of child behaviours reveals four skill dimensions, captured by attention, conduct, emotional, and peer problems. We find that conduct problems are linked to positive labour market outcomes, including higher earnings, increased labour supply and greater job satisfaction, with no significant effect on schooling. Conversely, attention problems correlate negatively with labour outcomes, partly due to educational effects. Our findings suggest the importance of early interventions which carefully distinguish between different socio-emotional problems.