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Fernando Saltiel, Miguel Sarzosa and Sergio Urzúa

Abilities matter. This chapter reviews the nature of cognitive and socio-emotional abilities and examines their importance in the development of successful lives. The text highlights the evidence documenting the causal association between abilities and labour market outcomes. It introduces an occupational tasks framework and shows how the interaction of abilities, skills and tasks is important for understanding labour market disparities. It concludes with policy recommendations based on interventions aimed at improving skills and future avenues for this research agenda.

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José de Gregorio, Dante Contreras, David Bravo and Sergio Urzua