Original article

IZA Journal of Labor Economics

, 1:4

First online:

Open Access This content is freely available online to anyone, anywhere at any time.

The use of cognitive ability measures as explanatory variables in regression analysis

  • Brian JunkerAffiliated withDept. of Statistics, Carnegie Mellon University
  • , Lynne Steuerle SchofieldAffiliated withDept. Mathematics & Statistics, Swarthmore College
  • , Lowell J TaylorAffiliated withHeinz College, Carnegie Mellon University Email author 


Cognitive ability measures are often taken as explanatory variables in regression analysis, e.g., as a factor affecting a market outcome such as an individual’s wage, or a decision such as an individual’s education acquisition. Cognitive ability is a latent construct; its true value is unobserved. Nonetheless, researchers often assume that a test score, constructed via standard psychometric practice from individuals’ responses to test items, can be safely used in regression analysis. We examine problems that can arise, and suggest that an alternative approach, a “mixed effects structural equations” (MESE) model, may be more appropriate in many circumstances.

JEL Code



Labor economics Structural equations modeling Item response theory