Maintaining (Locus of) Control? Assessing the Impact of Locus of Control on Education Decisions and Wages
AbstractThis paper demonstrates that locus of control, i.e. whether individuals believe that reinforcement in life comes from their own actions instead of being determined by luck or destiny, is an important predictor of the decision to obtain higher education. Furthermore, the authors find that premarket locus of control, defined as locus of control measured at the time of schooling – before the individual enters the labor market – does not significantly affect later wages after controlling for education decisions. In light of the existing literature, which finds mostly positive effects of contemporaneous locus of control measures on wages, this indicates that it is important to distinguish between premarket skills and those that are already influenced by labor market experience and age. Last, simulation of the model shows that moving individuals from the first to the last decile of the locus of control distribution significantly shifts the distribution of schooling choices, thus indirectly affecting later wages. The paper conveys important policy implications. If some personality traits, such as locus of control, influence the cost of education but not outcomes directly, these individual characteristics may keep individuals from studying who, once they reach the labor market, are no less successful than other individuals. If these individuals are at high risk of dropping out of school, early personality tests and targeted mentoring of students with an external locus of control are a means to countervail skill shortages in society.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5289.
Length: 52 pages
Date of creation: Oct 2010
Date of revision:
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Other versions of this item:
- Piatek, Rémi & Pinger, Pia R., 2010. "Maintaining (locus of) control? Assessing the impact of locus of control on education decisions and wages," ZEW Discussion Papers 10-093, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Rémi Piatek & Pia Pinger, 2010. "Maintaining (Locus of) Control?: Assessing the Impact of Locus of Control on Education Decisions and Wages," SOEPpapers on Multidisciplinary Panel Data Research 338, DIW Berlin, The German Socio-Economic Panel (SOEP).
- C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
- 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-11-13 (All new papers)
- NEP-CBE-2010-11-13 (Cognitive & Behavioural Economics)
- NEP-EDU-2010-11-13 (Education)
- NEP-LAB-2010-11-13 (Labour Economics)
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- Deborah A. Cobb-Clark & Sonja C. Kassenboehmer & Mathias G. Sinning, 2013.
"Locus of Control and Savings,"
Ruhr Economic Papers
0455, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
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- Cobb-Clark, Deborah A. & Kassenböhmer, Sonja C. & Sinning, Mathias, 2013. "Locus of Control and Savings," IZA Discussion Papers 7837, Institute for the Study of Labor (IZA).
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- Thiel, Hendrik & Thomsen, Stephan L., 2009. "Noncognitive skills in economics: Models, measurement, and empirical evidence," ZEW Discussion Papers 09-076, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- McGee, Andrew & McGee, Peter, 2011. "Search, Effort, and Locus of Control," IZA Discussion Papers 5948, Institute for the Study of Labor (IZA).
- Judith Offerhaus, 2013. "The Type to Train?: Impacts of Personality Characteristics on Further Training Participation," SOEPpapers on Multidisciplinary Panel Data Research 531, DIW Berlin, The German Socio-Economic Panel (SOEP).
- John, Katrin & Thomsen, Stephan L., 2012. "Heterogeneous Returns to Personality - The Role of Occupational Choice," Diskussionspapiere der Wirtschaftswissenschaftlichen FakultÃ¤t der Leibniz UniversitÃ¤t Hannover dp-495, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
- Michael Weinhardt & Jürgen Schupp, 2011. "Multi-Itemskalen im SOEP Jugendfragebogen," Data Documentation 60, DIW Berlin, German Institute for Economic Research.
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