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The Returns to Cognitive Abilities and Personality Traits in Germany

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Author Info
Guido Heineck
Silke Anger

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Abstract

We provide the first joint evidence on the relationship between individuals' cognitive abilities, their personality and earnings for Germany. Using data from the German Socio-Economic Panel Study, we employ scores from an ultra-short IQ-test and a set of measures of personality traits, namely locus of control, reciprocity and all basic items from the Five Factor Personality Inventory. Our estimates suggest a positive effect of so-called fluid intelligence or speed of cognition on males¿ wages only. Findings for personality traits are more heterogeneous. There however is a robust wage penalty for an external locus of control for both men and women.

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File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.88528.de/diw_sp0124.pdf
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Paper provided by DIW Berlin, The German Socio-Economic Panel (SOEP) in its series SOEPpapers with number 124.

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Length: 45 p.
Date of creation: 2008
Date of revision:
Handle: RePEc:diw:diwsop:diw_sp124

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Related research
Keywords: Cognitive abilities; personality traits; Five Factor Model; Locus of control; reciprocity; wages;

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Find related papers by 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
I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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References listed on IDEAS
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. Borghans Lex & Lee Duckworth Angela & Heckman James J. & Weel Bas ter, 2008. "The Economics and Psychology of Personality Traits," Research Memoranda 001, Maastricht : ROA, Research Centre for Education and the Labour Market. [Downloadable!]
    Other versions:
  2. Gerrit Mueller & Erik Plug, 2006. "Estimating the effect of personality on male and female earnings," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 60(1), pages 3-22, October. [Downloadable!] (restricted)
  3. Semykina, Anastasia & Linz, Susan J., 2007. "Gender differences in personality and earnings: Evidence from Russia," Journal of Economic Psychology, Elsevier, vol. 28(3), pages 387-410, June. [Downloadable!] (restricted)
  4. 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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  5. Cawley, John & Heckman, James & Vytlacil, Edward, 2001. "Three observations on wages and measured cognitive ability," Labour Economics, Elsevier, vol. 8(4), pages 419-442, September. [Downloadable!] (restricted)
  6. 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.
  7. Blackburn, McKinley L & Neumark, David, 1993. "Omitted-Ability Bias and the Increase in the Return to Schooling," Journal of Labor Economics, University of Chicago Press, vol. 11(3), pages 521-44, July. [Downloadable!] (restricted)
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  8. Cameron, Stephen V & Heckman, James J, 1993. "The Nonequivalence of High School Equivalents," Journal of Labor Economics, University of Chicago Press, vol. 11(1), pages 1-47, January. [Downloadable!] (restricted)
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  9. Hausman, Jerry A. & Taylor, William E., 1981. "Panel data and unobservable individual effects," Journal of Econometrics, Elsevier, vol. 16(1), pages 155-155, May. [Downloadable!] (restricted)
  10. Bronars, Stephen G. & Oettinger, Gerald S., 2006. "Estimates of the return to schooling and ability: evidence from sibling data," Labour Economics, Elsevier, vol. 13(1), pages 19-34, February. [Downloadable!] (restricted)
  11. Hausman, Jerry A & Taylor, William E, 1981. "Panel Data and Unobservable Individual Effects," Econometrica, Econometric Society, vol. 49(6), pages 1377-98, November. [Downloadable!] (restricted)
  12. 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.
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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. Silke Anger & Guido Heineck, 2009. "Do Smart Parents Raise Smart Children?: The Intergenerational Transmission of Cognitive Abilities," SOEPpapers 156, DIW Berlin, The German Socio-Economic Panel (SOEP). [Downloadable!]
  2. Nils Braakmann, 2009. "The Role of Psychological Traits for the Gender Gap in Full-time Employment and Wages: Evidence from Germany," SOEPpapers 162, DIW Berlin, The German Socio-Economic Panel (SOEP). [Downloadable!]
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