Cognitive and Non-cognitive Skill Formation in Japan: A State-Space Model approach to analyzing the effects of COVID-19

This study estimates the process of cognitive and non-cognitive skill formation from birth through adolescence in Japan and examines how skills formed before the COVID-19 pandemic were associated with school life and learning experiences during the transition to adulthood. Using individual-level data from the Longitudinal Survey of Newborns in the 21st Century (2001 Cohort), conducted by the Ministry of Health, Labour and Welfare and the Ministry of Education, Culture, Sports, Science and Technology, we apply a dynamic latent factor model based on Cunha et al. (2010). The components common to multiple observed indicators are estimated as cognitive skill, non-cognitive skill, and family investment factors. The transition equations indicate that, during the preschool period, the cognitive skill and family investment factors were associated with the non-cognitive skill factor in the subsequent period. After school entry, the non-cognitive skill and family investment factors were associated with both skill factors in the subsequent period. These findings suggest that the non-cognitive skill factor formed before school entry may have contributed to the subsequent formation of both types of skills through self-productivity and cross-productivity. In the estimates for 2022 and 2023, students with higher cognitive skill factors were less likely to report improvements in their satisfaction with school life and their understanding of course content, whereas those with higher non-cognitive skill factors were more likely to report such improvements. This pattern was consistently estimated across all combinations of sex and birth cohort. However, the negative coefficient on the cognitive skill factor may not necessarily reflect a deterioration in outcomes; it may also arise when students were already under relatively favorable conditions at the comparison point, leaving less room for improvement.