Early Test Scores, Socioeconomic Status and Future Outcomes

This paper examines the long-term effects of early test scores using data from the British National Child Development Survey. We show that test scores measured as early as age 7 have significant effects on future educational and labor market outcomes. For example, men and women in the lowest quartile of the reading test score distribution have wages 20% lower at age 33 than those who scored in the highest quartile. We test several hypotheses about the interactions between socioeconomic status and high or low test scores at age 7. In terms of test scores, educational attainments, and employment at age 33, low-SES children reap both larger gains from having high age 7 test scores and smaller losses from having low age 7 test scores. The opposite is true among high-SES children who suffer larger losses from low scores and smaller gains from high scores. However we find little evidence of comparable interactive effects for wages.