Math skills and market and non-market outcomes: Evidence from an Amazonian society of forager-farmers.
Research in industrial nations suggests that formal math skills are associated with improvements in market and non-market outcomes. But do these associations also hold in a highly autarkic setting with a limited formal labor market? We examined this question using observational annual panel data (2008 and 2009) from 1,121 adults in a native Amazonian society of forager-farmers in Bolivia (Tsimane’). Formal math skills were associated with an increase in wealth in durable market goods and in total wealth between data collection rounds, and with improved indicators of own reported perceived stress and child health. These associations did not vary significantly by people’s Spanish skills or proximity to town. We conclude that the positive association between math skills and market and non-market outcomes extends beyond industrial nations to even highly autarkic settings.
One nice element of this study is that the effect of math skills on economic outcomes is not through a “sheepskin effect”, whereby the benefits accrue to a degree or diploma, as there is no formal labour market where signals of that kind are used. In modern economies, it is hard to separate sheepskin effects from gains due to skills. In this case, the absence of a sheepskin effect means that it is the math skills themselves (or the general intelligence underlying those skills) that are paying off.