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Heterogeneous returns to personality: the role of occupational choice

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  • Katrin John
  • Stephan Thomsen

Abstract

We analyze the role of personality in occupational choice and wages using data from Germany for the years 1992 to 2009. Characterizing personality by use of seven complementary measures (Big Five personality traits, locus of control, and a measure of reciprocity), the empirical findings show that personal characteristics are important determinants of occupational choice. Associated with that, identical personality traits are differently rewarded across occupations. Hence, breaking down the analysis on the level of occupational groups provides more detailed results of returns to personality. By evaluating different personality profiles, we additionally estimate the influence of personality as a whole. The estimates establish occupation-specific patterns of significant returns to particular personality profiles. These findings underline the importance to consider the occupational distribution when analyzing returns to personality due to its heterogeneous valuation. Copyright Springer-Verlag Berlin Heidelberg 2014

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  • Katrin John & Stephan Thomsen, 2014. "Heterogeneous returns to personality: the role of occupational choice," Empirical Economics, Springer, vol. 47(2), pages 553-592, September.
    • Handle: RePEc:spr:empeco:v:47:y:2014:i:2:p:553-592
    DOI: 10.1007/s00181-013-0756-8
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    Cited by:

    1. Thiel, Hendrik & Thomsen, Stephan L., 2013. "Noncognitive skills in economics: Models, measurement, and empirical evidence," Research in Economics, Elsevier, vol. 67(2), pages 189-214.
    2. Bühler, Dorothee & Sharma, Rasadhika & Stein, Wiebke, 2020. "Occupational Attainment and Earnings in Southeast Asia: The Role of Non-cognitive Skills," Labour Economics, Elsevier, vol. 67(C).
    3. Peter Huber & Ulugbek Rahimov, 2017. "The Self-Selection of Workers to the Formal and Informal in Transition Economies: Evidence from Tajikistan," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 67(2), pages 140-164, April.
    4. Brencic, Vera & McGee, Andrew, 2023. "Demand for Personality Traits, Tasks, and Sorting," Working Papers 2023-13, University of Alberta, Department of Economics.
    5. Matthias Collischon, 2020. "The Returns to Personality Traits Across the Wage Distribution," LABOUR, CEIS, vol. 34(1), pages 48-79, March.
    6. Mehrzad B. Baktash & Uwe Jirjahn, 2023. "Are Managers More Machiavellian Than Other Employees?," Research Papers in Economics 2023-07, University of Trier, Department of Economics.
    7. Kai Ingwersen & Stephan L. Thomsen, 2021. "The immigrant-native wage gap in Germany revisited," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 19(4), pages 825-854, December.
    8. Alderotti, Giammarco & Rapallini, Chiara & Traverso, Silvio, 2023. "The Big Five personality traits and earnings: A meta-analysis," Journal of Economic Psychology, Elsevier, vol. 94(C).
    9. Isabelle Bensidoun & Danièle Trancart, 2015. "The Gender Wage Gap in France: the Role of Non-Cognitive Characteristics," Working Papers DT/2015/08, DIAL (Développement, Institutions et Mondialisation).
    10. Dahmann, Sarah & Anger, Silke, 2014. "The impact of education on personality : evidence from a German high school reform," IAB-Discussion Paper 201429, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    11. Brenčič, Vera & McGee, Andrew, 2023. "Demand for Personality Traits, Tasks, and Sorting," IZA Discussion Papers 16576, Institute of Labor Economics (IZA).
    12. Eckhardt Bode & Stephan Brunow & Ingrid Ott & Alina Sorgner, 2019. "Worker Personality: Another Skill Bias beyond Education in the Digital Age," German Economic Review, Verein für Socialpolitik, vol. 20(4), pages 254-294, November.
    13. Kuhn, Andreas & Wolter, Stefan C., 2022. "Things versus People: Gender Differences in Vocational Interests and in Occupational Preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 203(C), pages 210-234.
    14. Thomas Buser & Rafael Ahlskog & Magnus Johannesson & Sven Oskarsson, 2022. "Occupational sorting on genes," Tinbergen Institute Discussion Papers 22-062/I, Tinbergen Institute, revised 29 Mar 2023.
    15. Josten, Cecily & Lordan, Grace, 2024. "Who Makes It to the Top? Differential Rewards to Personality across Gender and Occupation in the UK," IZA Discussion Papers 16754, Institute of Labor Economics (IZA).
    16. repec:dau:papers:123456789/15003 is not listed on IDEAS
    17. Ksenia V. Rozhkova & Natalya Yemelina & Sergey Yu. Roshchin, 2021. "Can Non-Cognitive Skills Explain The Gender Wage Gap In Russia? An Unconditional Quantile Regression Approach," HSE Working papers WP BRP 252/EC/2021, National Research University Higher School of Economics.
    18. Blázquez, Maite & Herrarte, Ainhoa & Llorente-Heras, Raquel, 2018. "Competencies, occupational status, and earnings among European university graduates," Economics of Education Review, Elsevier, vol. 62(C), pages 16-34.
    19. Eckhardt Bode & Lucia Perez Villar, 2017. "Creativity, education or what? On the measurement of regional human capital," Papers in Regional Science, Wiley Blackwell, vol. 96, pages 51-67, March.
    20. Maksimova, Mariia, 2019. "The return to non-cognitive skills on the Russian labor market," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 53, pages 55-72.
    21. Hendrik Thiel & Stephan L. Thomsen & Bettina Büttner, 2014. "Variation of learning intensity in late adolescence and the effect on personality traits," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 177(4), pages 861-892, October.
    22. Maczulskij, Terhi & Viinikainen, Jutta, 2021. "Personality and Public Sector Employment," ETLA Working Papers 86, The Research Institute of the Finnish Economy.
    23. Wolfram, Tobias, 2023. "(Not just) Intelligence stratifies the occupational hierarchy: Ranking 360 professions by IQ and non-cognitive traits," Intelligence, Elsevier, vol. 98(C).
    24. Mareckova, Jana & Pohlmeier, Winfried, 2017. "Noncognitive Skills and Labor Market Outcomes: A Machine Learning Approach," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168195, Verein für Socialpolitik / German Economic Association.
    25. Natalie Obergruber, 2018. "Microeconometric Analysis of Individual and Institutional Determinants of Education and Occupational Choice," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 80.

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    More about this item

    Keywords

    Occupational choice; Wage differentials; Big Five personality traits; Locus of control; Measures of reciprocity; SOEP; J24; J31; C35;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions

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