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Self-esteem, education, and wages revisited

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  • de Araujo, Pedro
  • Lagos, Stephen

Abstract

Personality undoubtedly plays a role in determining educational attainment and labor market outcomes. We investigate the role of self-esteem in determining wages directly and indirectly via education. We use data from the 1979 wave of the National Longitudinal Study of Youth (NLSY79) to estimate a three equation simultaneous equation model that treats self-esteem, educational attainment, and real wages as endogenous. We find that, while self-esteem has a positive and significant impact on wages indirectly via education, it does not significantly affect wages directly once we control for locus of control. We find that the indirect effect of self-esteem comprises upwards of 80% of the total effect of self-esteem on wages after 1980. Additionally, we find that wages and education both affect self-esteem. We discuss gender differences in the relationships between wages, education, and self-esteem and conclude that females experience a higher rate of return on education than males, and self-esteem is a stronger determinant of educational attainment for males than females.

Suggested Citation

  • de Araujo, Pedro & Lagos, Stephen, 2013. "Self-esteem, education, and wages revisited," Journal of Economic Psychology, Elsevier, vol. 34(C), pages 120-132.
    • Handle: RePEc:eee:joepsy:v:34:y:2013:i:c:p:120-132
    DOI: 10.1016/j.joep.2012.12.001
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    Cited by:

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    2. Pamela Lenton, 2014. "Personality Characteristics, Educational Attainment and Wages: An Economic Analysis Using the British Cohort Study," Working Papers 2014011, The University of Sheffield, Department of Economics.
    3. Chen, Weiwei & Grove, Wayne A. & Hussey, Andrew, 2017. "The role of confidence and noncognitive skills for post-baccalaureate academic and labor market outcomes," Journal of Economic Behavior & Organization, Elsevier, vol. 138(C), pages 10-29.
    4. Leonora Risse & Lisa Farrell & Tim R L Fry, 2018. "Personality and pay: do gender gaps in confidence explain gender gaps in wages?," Oxford Economic Papers, Oxford University Press, vol. 70(4), pages 919-949.
    5. Szabó-Morvai, Ágnes & Kiss, Hubert János, 2022. "Különböznek-e a roma és nem roma diákok nem kognitív képességeikben? [Do Roma and non-Roma students differ in their non-cognitive abilities?]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(11), pages 1433-1456.
    6. Martí­n Leites & Xavier Ramos, 2017. "The effect of relative concern on life satisfaction: Relative deprivation and loss aversion," Documentos de Trabajo (working papers) 17-18, Instituto de Economía - IECON.
    7. Peter Schwardmann & Joël van der Weele, 2016. "Deception and Self-Deception," Tinbergen Institute Discussion Papers 16-012/I, Tinbergen Institute.
    8. Bahram Sanginabadi, 2020. "Does Schooling Causally Impact Non-Cognitive Skills? Evidence from Elimination of Social Security Student Benefits," Economies, MDPI, vol. 8(1), pages 1-27, January.
    9. Tang, Ning & Baker, Andrew, 2016. "Self-esteem, financial knowledge and financial behavior," Journal of Economic Psychology, Elsevier, vol. 54(C), pages 164-176.
    10. Kamal, Mustafa & Blacklow, Paul, 2022. "Self-control and risk aversion in the Australian gender wage gap," Working Papers 2022-01, University of Tasmania, Tasmanian School of Business and Economics.
    11. Maclean, Johanna Catherine & Hill, Terrence D., 2015. "Leaving school in an economic downturn and self-esteem across early and middle adulthood," Labour Economics, Elsevier, vol. 37(C), pages 1-12.
    12. Alexander Ahammer & Mario Lackner & Jasmin Voigt, 2017. "Does Confidence Enhance Performance? Causal Evidence from Professional Biathlon," CDL Aging, Health, Labor working papers 2017-18, The Christian Doppler (CD) Laboratory Aging, Health, and the Labor Market, Johannes Kepler University Linz, Austria.
    13. Kamal, Mustafa & Blacklow, Paul, 2021. "Australian age, period, cohort effects in the gender wage gap - 2001 to 2018," Working Papers 2021-02, University of Tasmania, Tasmanian School of Business and Economics.
    14. Martín Leites & Xavier Ramos, 2022. "The Effect of Relative Income Concerns on Life Satisfaction: Relative Deprivation and Loss Aversion," Journal of Happiness Studies, Springer, vol. 23(7), pages 3485-3515, October.

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    More about this item

    Keywords

    Self-esteem; Determinants of wages; Simultaneous equation model; Gender inequality;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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