Alternative Measures of Noncognitive Skills and Their Effect on Retirement Preparation and Financial Capability

Published: 2017


Social science, more than ever, is drawing upon the insights of personality psychology. Though researchers now know that noncognitive skills and personality traits, such as conscientiousness, grit, self-control, or a growth mindset could be important for life outcomes, they struggle to find reliable measures of these skills. Self-reports are often used for analysis, but these measures have been found to be affected by important biases. We study the validity of innovative, more robust measures of noncognitive skills based on performance tasks. Our first proposed measure is an adaptation, for the adult population, of the Academic Diligence Task (ADT) developed and validated among students by Galla et al. (2014). For our second type of performance task measures of noncognitive skills, we argue that questionnaires themselves can be seen as performance tasks, such that measures of survey effort, e.g. item non-response rates and degree of carelessness in answering, could lead to meaningful measures of noncognitive skills. New measures along with self-reports are then used to study the role of noncognitive skills and personality traits on an individual’s preparation for retirement and financial capability. In a world where individuals are increasingly asked to take responsibility for retirement preparations and when available financial products to do so are growing in sophistication, a better understanding of how noncognitive skills influence retirement preparation could help effective policy design.

Key Findings

    • Noncognitive skills and personality traits, such as grit, conscientiousness, and neuroticism are found to be significantly associated with levels of financial capability and the retirement preparation of adults in the Understanding America Study.
    • The authors find that alternative measures of these noncognitive skills, based on self-reports and performance task measures such as the degree of carelessness in responding to surveys, are significantly associated with important financial outcomes, even after taking into account differences in cognitive ability and relevant sociodemographic information.
    • Results highlight the importance of considering psychological factors when designing policies that aim to improve the level of financial capability and retirement preparation in the population.


Gema Zamarro


Zamarro, Gema. 2017. “Alternative Measures of Noncognitive Skills and Their Effect on Retirement Preparation and Financial Capability.” Ann Arbor MI: University of Michigan Retirement Research Center (MRRC) Working Paper, WP 2017-365.