Abstract
In this paper we estimate the causal relationship between schooling and non- cognitive skills in later life. We exploit two exogenous changes in education policy in China and Indonesia and estimate the effect of schooling on non-cognitive skills as measured by the Locus of Control and five-factor model. We employ Regression Probability Jump and Kink Design (RPJK) for identification. Our results indicate that schooling leads to a less Internal Locus of Control, and makes individuals more conscientious, open and extroverted. The effect of schooling on non-cognitive skills can explain significant variation in returns to schooling on the labor market.
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