854 vIII. EMERGING  ISSuES AND  NEW  DIRECTIONS
skills in different amounts and proportions. 
Earnings are rewards to multiple tasks in 
different markets (Mandelbrot, 1962). Peo -
ple differ in their endowments of skills.
Economists contribute to personality psy -
chology by using psychological skills (pri -
marily the Big Five and its relatives) to predict 
life outcomes (see, e.g., Heckman, Stixrud, 
& Urzúa, 2006; Flinn, Todd, & Zhang, 
2019) and to evaluate the outcomes of edu -
cational interventions (see Cunha & Heck -
man, 2008b; Cunha, Heckman, & Schen -
nach, 2010; Heckman, Pinto, & Savelyev, 
2013; Alan & Ertac, 2018; Kosse, Deckers, 
Schildberg-  Hörisch, & Falk, 2020). They 
enrich personality psychology by develop -
ing and applying rigorous methodologies for 
measurement and assessment.
Economists relate psychologists’ skills 
to economic preference parameters, which 
are the fundamental drivers of decisions in 
economic theory (see A. Becker et al., 2012; 
Borghans, Duckworth, Heckman, & ter 
Weel, 2008; Jagelka, 2018). Research on this 
topic is rapidly expanding in economics. An 
open question for both fields is the number 
and nature of preferences, personality types, 
and skills indicators required to adequately 
characterize differences in human potential.
This research has illuminated the infor -
mation contained in the scores from achieve -
ment tests. Modern societies rely on written 
tests to sift and sort people, to evaluate stu -
dents and schools, and to assess the perfor -
mance of entire nations.1 Achievement tests 
play a prominent role. The Organization for 
Economic Cooperation and Development 
(OECD) actively promotes Programme for 
International Student Assessment (PISA) 
tests. In the United States, high school 
dropouts can take a 7.5-hour achievement 
test—the General Educational Development 
(GED) exam—to certify that they are equiv -
alent to high school graduates.2
Achievement tests were developed in the 
mid-20th century to measure a new con -
cept— general knowledge —in an attempt 
to measure skills that are useful inside and 
outside of the classroom.3 Their developers 
thought that they had designed pencil-  and-
paper tests that would predict success in the 
labor market, in education, and in many 
other aspects of life. However, initially they did not validate the tests’ predictive power 
for important life outcomes outside the 
classroom.
Instead, validation of these tests is usually 
circular, as we illustrate below in our discus -
sion of the GED. Achievement tests are typi -
cally validated using IQ tests and grades, 
and not by their ability to predict important 
nonacademic life outcomes. The recent liter -
ature has conducted more meaningful evalu -
ations of these tests.
Achievement test scores predict only a 
small fraction of the variance in later-life 
success. For example, adolescent achieve -
ment test scores explain, at most, 17% of the 
variability in later-life earnings.4 Measure -
ment error accounts for at most 30% of the 
remaining variability.5
Achievement tests do not adequately cap -
ture noncognitive or socioemotional skills , 
a broad set of characteristics including pref -
erences and personality. Examples include 
perseverance (sometimes called “grit”), 
conscientiousness (also called “grit”), self- 
control, trust, attentiveness, self-  esteem and 
self- efficacy, resilience to adversity, open -
ness to experience, empathy, humility, toler -
ance of diverse opinions, and the ability to 
engage productively in society, which are 
valued in the labor market, in school, and 
in society at large. Until recently, these skills 
have largely been ignored in evaluations of 
persons, schools, and interventions to im -
prove lifetime prospects. In recent research, 
economists and psychologists have con -
structed measures of these skills and provide 
evidence that they are stable across situa -
tions and predict meaningful life outcomes.6
Skills are not set in stone at birth and 
determined solely by genes. They can be 
fostered. Cognitive and noncognitive skills 
change with age and with instruction. In -
terventions to improve skills are effective to 
different degrees for different skills at dif -
ferent ages. Importantly, noncognitive skills 
are more malleable at later ages than are 
cognitive skills.
A growing body of empirical research 
shows that noncognitive skills rival IQ in 
predicting educational attainment, labor 
market success, health, and criminality.7 
Both IQ and noncognitive skills predict 
scores on achievement tests. Noncognitive 