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The purpose of this study is to extend related literature on life satisfaction. In particular, the author explores the link between tolerance, governance and life…
The purpose of this study is to extend related literature on life satisfaction. In particular, the author explores the link between tolerance, governance and life satisfaction inequality in a sample of 81 countries. While studies have shown that tolerance and governance are separately linked to subjective well-being, no study has shown their mutual relationship to life satisfaction inequality.
Considering the existing link between tolerance and quality of institutions, in this study, the author explores the relationship between tolerance and life satisfaction inequality and the mediating role of governance. This research could be embedded in the framework of ballooning research exploring the effect of societal values on institutions and life satisfaction.
The empirical findings suggest more tolerant societies are more likely to have more even levels of life satisfaction, but this correlation is completely mediated by governance. Quality of institutions thus seem to be one of the core channels by which societies that value tolerance achieve more equal distribution of happiness. The author also finds that while GDP per capita evens out happiness, income inequality increases the gap in life satisfaction within society.
To the best of the author’s knowledge, this study is the first that relies on most up-to-date cross-country data to explore a novel channel through which tolerance may be linked to subjective well-being. In particular, in this study, the author posits that tolerance may have been linked to subjective well-being indirectly via its impact on quality of institutions (governance).
Related literature finds that human capital proxied by cognitive abilities is an important antecedent of numerous specific life outcomes. The purpose of this study is to…
Related literature finds that human capital proxied by cognitive abilities is an important antecedent of numerous specific life outcomes. The purpose of this study is to extend existing evidence by investigating the link between cognitive skills and income in Tajikistan. Tajikistan is a landlocked low-income country situated in Central Asia. Its population is 9.1 million people and gross domestic product per capita of US$822. According to the World Bank, Tajikistan has made significant progress in decreasing poverty levels from 83% in 2000 to 29.5% in 2017.
The data for this study comes from the 2013 Jobs, Skills and Migration Survey conducted by the World Bank and the German Society for International Cooperation. The main explanatory variable of the study is the cognitive abilities index of the respondents. The survey used item response theory (IRT) approach to estimate the ability of respondents. IRT is a method or a set of statistical frameworks, used to explore assessment item data, such as cognitive abilities assessment data. The wage function was estimated using the ordinary least squares method because the results are easier to interpret (Jencks, 1979; Bowles et al., 2001; Groves, 2006).
The baseline results are reported in Table 2. The results in Column 1 demonstrated the link between cognitive abilities and income without control variables (unconditional model). As expected, cognitive abilities are positively and significantly related to income (a1 = 0.0715, p < 0.01). The results from the unconditional model suggest that one standard deviation increase in cognitive abilities is associated with a nearly 17% increase in income.
However, the study has a number of limitations. First, the dependent variable measures the overall income of the respondent, which includes the profit from other businesses. The survey does not provide data on monthly wages of respondents. Second, the sample may not perfectly represent the overall population of Tajikistan. To partially resolve this issue, this paper re-estimated out results for various sub-samples. Another important limitation of this study is the lack of respondent’s family background, which is an important correlate of human capital and income.
The results in the study offer preliminary evidence on the link between cognitive abilities and income in Tajikistan. However, the results of the study also suggest that both measures of human capital are positively related to income. Therefore, policymakers in Tajikistan should invest greater resources to health care, education and training programs as cognitive skills can be built in particular in the early stages of the life cycle. Indeed, Tajikistan has a significant potential for economic growth model driven by human capital. According to the World Bank, the adult literacy rate in Tajikistan is 100%, which is significantly above of what is observed in other developing countries. This may imply that the human potential in this country is considerable, and further investment in soft and hard skills would have a positive impact on economic growth.
This paper offers new evidence on the link between cognitive abilities and income, using data from Tajikistan. First, this paper finds that cognitive abilities are positively and significantly correlated with income. Second, this paper finds that this link remains robust even when this paper control for a large set of personal and job-related characteristics. The results from the unconditional model suggest that one standard deviation increase in cognitive abilities is associated with nearly a 17% increase in income.