Is being agreeable a key to success or failure in the labor market?

The aim of this study is to elucidate how individual differences in noncognitive skills, as measured by the Big Five personality traits, explain variation in labor market outcomes. Japanese and U.S. survey data are analyzed to examine the associations between personality traits and annual income in the two countries. In particular, we focus on a country-specific, noncognitive determinant of annual income, which is found in agreeableness among male workers. Agreeableness contributes to higher annual income in male workers in Japan, but acts as a penalty for male workers in the U.S. This contrasting effect of agreeableness remains significant even when controlling for labor-related variables such as occupation, industry sector, employment type, and working hours. However, the wage penalty of agreeableness observed in the U.S. labor market is heterogeneous, differing by firm size. Negative effects are pronounced only in smaller companies; they disappear in large companies. In Japan, where higher agreeableness on average translates to higher income, the income premium is strengthened at large companies. This income premium of agreeableness does not necessarily result from career promotion, suggesting that agreeableness might act as part of a skill set directly improving job performance and productivity, rather than acting indirectly through occupational choice or career advancement.