# **Introduction**

People with higher socioemotional skills do better on the labor market (Saltiel, Sarzosa, and Urzúa 2017; Acosta and Muller 2018). Once overlooked, people’s behaviors and personality traits —their socioemotional skills— have been increasingly seen as essential factors explaining their trajectories in school and the labor market, at least much as their mental abilities —their cognitive skills—, long viewed as the primary determinants of success (Almlund et al. 2011). Three types of evidence sparked this rising interest: first, that beneficiaries of early childhood programs, designed to foster socioemotional development, had strikingly better labor-market and other outcomes decades later when adults (Heckman, Pinto, and Savelyev 2013; Gertler et al. 2014); second, that children and youth with both higher cognitive and socioemotional skills measured by longitudinal surveys had better education, labor-market, and a range of other desirable outcomes later in life (Heckman, Stixrud, and Urzúa 2006; OECD 2015); and third, employers in various countries think that socioemotional skills are of primary importance and lament the lack of them for their employees (Cunningham and Villaseñor 2016).

It is unclear, however, how much socioemotional skills matter for people in low- or middle-income countries. The consensus about the positive influence of these skills on the labor market is almost exclusively based on data from high-income countries.<sup>1</sup> Plus, although differences in skills measures and surveyed populations often challenge comparability, multi-country studies suggest that the returns to cognitive and socioemotional skills vary across countries (Hanushek et al. 2015, 2017; OECD 2015). Indeed, the estimated wage returns to comparable measures of cognitive skills of adults in 32 countries range from 0.11 in Greece to 0.47 in Singapore (Hanushek et al. 2017).<sup>2</sup> For socioemotional skills, for example, the impact of raising adolescents’ self-confidence in Norway and Switzerland from the lowest to the highest decile on the probability of being in the top income quartile in adulthood is as different as 35 and 15 percent, respectively (OECD 2015).

A handful of studies on the topic in low- and middle-income countries confirm the unpredictability of results in a given country. Two longitudinal studies in rural China (Glewwe, Huang, and Park 2017) and Madagascar (Sahn and Villa 2016) suggest that both types of skills measured in childhood correlate with better labor market outcomes in early adulthood, mostly through their influence on education trajectories and sorting in employment sectors, rather than on productivity. A few cross-sectional studies in

> 1 Empirical research on the influence of socioemotional skills on labor market outcomes include studies on the Netherlands (Nyhus and Pons 2005), the United States (Heckman, Stixrud, and Urzúa 2006), Great Britain (Carneiro, Crawford, and Goodman 2007), Germany (Heineck and Anger 2010), Australia (Cobb-Clark and Tan 2011), and Sweden (Lindqvist and Vestman 2011), among others. OECD (2015) studies data for nine countries that also includes Belgium’s Flemish Community, Canada, Korea, New Zealand, Norway, and Switzerland.

> 2 The estimates correspond to a measure of cognitive skills based on numeracy. The cross-country patterns are similar using alternative measures such as literacy and problem solving.

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