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Estimating the Effect of Personality on Male-Female Earnings

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  • Mueller, Gerrit

    (ZEW Mannheim)

  • Plug, Erik

    (University of Amsterdam)

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.

Suggested Citation

  • Mueller, Gerrit & Plug, Erik, 2004. "Estimating the Effect of Personality on Male-Female Earnings," IZA Discussion Papers 1254, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp1254
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    Cited by:

    1. Lex Borghans & Bas ter Weel & Bruce A. Weinberg, 2008. "Interpersonal Styles and Labor Market Outcomes," Journal of Human Resources, University of Wisconsin Press, vol. 43(4).
    2. Del Bono, Emilia & Vuri, Daniela, 2011. "Job mobility and the gender wage gap in Italy," Labour Economics, Elsevier, vol. 18(1), pages 130-142, January.
    3. Alan Manning & Joanna Swaffield, 2008. "The gender gap in early-career wage growth," Economic Journal, Royal Economic Society, vol. 118(530), pages 983-1024, July.
    4. Budría, Santiago & Ferrer-i-Carbonell, Ada, 2012. "Income Comparisons and Non-Cognitive Skills," IZA Discussion Papers 6419, Institute of Labor Economics (IZA).
    5. Ham, Roger & Junankar, Pramod N. (Raja) & Wells, Robert, 2009. "Occupational Choice: Personality Matters," IZA Discussion Papers 4105, Institute of Labor Economics (IZA).
    6. Canton, E.J.F. & Verheul, I., 2009. "Gender Pay Differences in the European Union: Do Higher Wages Make Up For Discrimination?," ERIM Report Series Research in Management ERS-2009-041-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    7. Booth, Alison L., 2009. "Gender and competition," Labour Economics, Elsevier, vol. 16(6), pages 599-606, December.
    8. Kevin Denny & Vincent O’ Sullivan, 2007. "The Economic Consequences of Being Left-Handed: Some Sinister Results," Journal of Human Resources, University of Wisconsin Press, vol. 42(2).
    9. Joanna K. Swaffield, 2007. "Estimates Of The Impact Of Labour Market Attachment And Attitudes On The Female Wage," Manchester School, University of Manchester, vol. 75(3), pages 349-371, June.
    10. Rodgers III, William M. & Stratton, Leslie S., 2005. "The Male Marital Wage Differential: Race, Training, and Fixed Effects," IZA Discussion Papers 1745, Institute of Labor Economics (IZA).
    11. Emilia Del Bono & Daniela Vuri, 2008. "Job mobility and the gender wage gap," Working Papers - Dipartimento di Economia 7-DEISFOL, Dipartimento di Economia, Sapienza University of Rome, revised 2008.
    12. Ham, Roger & Junankar, Pramod N. (Raja) & Wells, Robert, 2009. "Antagonistic Managers, Careless Workers and Extraverted Salespeople: An Examination of Personality in Occupational Choice," IZA Discussion Papers 4193, Institute of Labor Economics (IZA).
    13. Kim, Jinho, 2016. "Personality traits and body weight: Evidence using sibling comparisons," Social Science & Medicine, Elsevier, vol. 163(C), pages 54-62.
    14. Kevin Denny & Patrick Orla Doyle, 2005. "Political Interest, Cognitive Ability and Personality - Determinants of Voter Turnout in Britain," Working Papers 200511, School of Economics, University College Dublin.
    15. 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.
    16. Lindeboom, Maarten & Lundborg, Petter & van der Klaauw, Bas, 2009. "Obesity and Labor Market Outcomes: Evidence from the British NCDS," IZA Discussion Papers 4099, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    personality and wages; gender wage gap;

    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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