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Estimating the Effect of Personality on Male-Female Earnings

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Author Info
Gerrit Müller () (Faculty of Economics, Erasmus Universiteit Rotterdam)
Erik Plug () (Faculty of Economics and Econometrics, Universiteit van Amsterdam)

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Abstract

This paper uses the Five-Factor Model of personality structure as an organizing framework to explore the effects of personality on earnings. Using data from a longitudinal survey of American high school graduates, we find that extroversion, agreeableness, conscientiousness, neuroticism and openness to experience are rewarded/penalized significantly and differentially across genders. Antagonistic, emotionally stable and open men enjoy substantial earnings advantages over otherwise similar individuals. In case of women, the labor market appears to value conscientiousness and openness to experience. The positive returns to openness are very similar across genders, suggesting that being creative, unconventional and artistic is equally important for men and women working in all types of occupations. Moreover, we find significant gender differences in personality characteristics. Decomposition of personality-based earnings differentials into trait and parameter effects suggests that gender-atypical traits reduce the earnings advantage that individuals would otherwise enjoy under their own-sex wage structure. Overall, we find that the impact of personality on earnings is significant but not large --not trivial either-- and comparable to the impact of differences in cognitive ability.

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Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 04-087/3.

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Date of creation: 17 Aug 2004
Date of revision: 31 Aug 2005
Handle: RePEc:dgr:uvatin:20040087

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Related research
Keywords: personality and wages gender wage gap

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Find related papers by JEL classification:
J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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References listed on IDEAS
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  1. Griliches, Zvi & Mason, William M, 1972. "Education, Income, and Ability," Journal of Political Economy, University of Chicago Press, vol. 80(3), pages S74-S103, Part II, . [Downloadable!] (restricted)
  2. Samuel Bowles & Herbert Gintis & Melissa Osborne, 2001. "The Determinants of Earnings: A Behavioral Approach," Journal of Economic Literature, American Economic Association, vol. 39(4), pages 1137-1176, December. [Downloadable!] (restricted)
  3. Richard J. Murnane & John B. Willett & Frank Levy, 1995. "The Growing Importance of Cognitive Skills in Wage Determination," NBER Working Papers 5076, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  4. Randall K. Filer, 1986. "The role of personality and tastes in determining occupational structure," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 39(3), pages 412-424, April.
  5. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October. [Downloadable!] (restricted)
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  6. Lee Cronbach, 1951. "Coefficient alpha and the internal structure of tests," Psychometrika, Springer, vol. 16(3), pages 297-334, September. [Downloadable!] (restricted)
  7. Goldsmith, Arthur H & Veum, Jonathan R & Darity, William, Jr, 1997. "The Impact of Psychological and Human Capital on Wages," Economic Inquiry, Oxford University Press, vol. 35(4), pages 815-29, October.
  8. James J. Heckman & Yona Rubinstein, 2001. "The Importance of Noncognitive Skills: Lessons from the GED Testing Program," American Economic Review, American Economic Association, vol. 91(2), pages 145-149, May. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Alan Manning & Joanna Swaffield, 2005. "The Gender Gap in Early Career Wage Growth," CEP Discussion Papers dp0700, Centre for Economic Performance, LSE. [Downloadable!]
    Other versions:
  2. William M. Rodgers III & Leslie S. Stratton, 2005. "The Male Marital Wage Differential: Race, Training, and Fixed Effects," IZA Discussion Papers 1745, Institute for the Study of Labor (IZA). [Downloadable!]
  3. Andrea Galeotti & Gerrit Müller, 2005. "Friendship Relations in the School Class and Adult Economic Attainment," Tinbergen Institute Discussion Papers 05-032/3, Tinbergen Institute, revised 08 Aug 2005. [Downloadable!]
  4. Weinberg, Bruce A. & Borghans, Lex & Weel, Bas ter, 2006. "Interpersonal Styles and Labor Market Outcomes," UNU-MERIT Working Paper Series 045, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology. [Downloadable!]
    Other versions:
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