Destruction of cognitive and noncognitive skills in adulthood

The formation of cognitive and noncognitive skills in adulthood has been scarcely studied in the economic and psychological literature. The lack of studies addressing this production process is explained in part by past results pointing to the stabilization of skills at the last years of adolescence. However, recent evidence supports the malleability of skills during adulthood. Following the latter strand of the literature, we identify events associated with the destruction of skills during this age. Furthermore, we evaluate the effects of the skills dynamics on labor market outcomes such as wages and employability. We extend the model of formation of skills (Cunha and others, 2010) and estimate it in its reduced form using the 1970 British Cohort Study. Results show that three or more months of unemployment are related to a decrease of 0.15 SD of skills level.