Department of Economics, UCSC

Is the AFQT a measure of achievement or innate ability? In this paper, we test for a relationship between schooling and AFQT performance in the NLSY 79 by comparing test-takers with birthdays near state cutoff dates for school entry. We instrument for schooling at the test date with “academic cohort”—the year in which an individual should have entered first grade given her birthday and the state in which she was likely to have entered school—in a model which allows age at the test date to have a direct effect on AFQT performance. This identification strategy reveals large impacts of schooling on the AFQT performance of blacks and Hispanics, but no schooling effect for whites. Within race, schooling is generally found to have larger impacts on the more academic components of the underlying test battery. On balance, these findings provide support for the hypothesis that the AFQT measures school achievement.