Lee, Marcos Ki HyungKomatsu, Bruno KawaokaMenezes Filho, Naercio2025-12-032025-12-032025-08LEE, Marcos Ki Hyung; KOMATSU, Bruno Kawaoka; MENEZES FILHO, Naercio. Estimating the college income premium accounting for cognitive and non-cognitive latent skills. Pesquisa e Planejamento Econômico, Brasília, v. 55, n. 2, p. 9-36, ago. 2025. DOI: http://dx.doi.org/10.38116/ppe55n2art1.https://repositorio.ipea.gov.br/handle/11058/19644In this paper, we estimate the returns to higher education in Brazil, controlling for the effects of latent abilities. We leverage a unique data that measures cognitive and noncognitive abilities to estimate a structural factor model that accounts for the effects of latent cognitive and non cognitive skills. We find that college returns are on average 43% and they are positive even for the lowest levels of cognitive and non-cognitive skills. Additionally, both cognitive and non-cognitive skills influence the probability of having college education, but cognitive abilities have a larger effect. Among the college educated workers, cognitive skills are more important for earnings, but among the unskilled workers, non-cognitive skills are more rewarded.engAcesso AbertoJournal ArticleInstituto de Pesquisa Econômica Aplicada (Ipea)Ensino SuperiorLicença ComumÉ permitida a reprodução deste texto e dos dados nele contidos, desde que citada a fonte. Reproduções para fins comerciais são proibidas.Cognitive skillNon-cognitive skillEducationUnobserved heterogeneityIncomeJ Labor and Demographic Economics::J2 Demand and Supply of Labor::J24 Human Capital - Skills - Occupational Choice - Labor ProductivityD Microeconomics::D3 Distribution::D31 Personal Income, Wealth, and Their DistributionsI Health, Education, and Welfare::I2 Education and Research Institutions::I24 Education and InequalityHabilidades cognitivasHabilidades não cognitivasEducaçãoHeterogeneidade não observadaRendahttp://dx.doi.org/10.38116/ppe55n2art1