April 2020

IZA DP No. 13124: Inequality in Socio-Emotional Skills: A Cross-Cohort Comparison

Published in: Journal of Public Economics, online 30 March 2020.

We examine changes in inequality in socio-emotional skills very early in life in two British cohorts born 30 years apart. We construct comparable scales using two validated instruments for the measurement of child behaviour and identify two dimensions of socio-emotional skills: 'internalising' and 'eternalising'. Using recent methodological advances in factor analysis, we establish comparability in the inequality of these early skills across cohorts, but not in their average level. We document for the first time that inequality in socio-emotional skills has increased across cohorts, especially for boys and at the bottom of the distribution. We also formally decompose the sources of the increase in inequality and find that compositional changes explain half of the rise in inequality in externalising skills. On the other hand, the increase in inequality in internalising skills seems entirely driven by changes in returns to background characteristics. Lastly, we document that socio-emotional skills measured at an earlier age than in most of the existing literature are significant predictors of health and health behaviours. Our results show the importance of formally testing comparability of measurements to study skills dierences across groups, and in general point to the role of inequalities in the early years for the accumulation of health and human capital across the life course.