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Personality, IQ, and lifetime earnings

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  • Gensowski, Miriam

Abstract

This paper estimates the effects of personality traits and IQ on lifetime earnings of the men and women of the Terman study, a high-IQ U.S. sample. Age-by-age earnings profiles allow a study of when personality traits affect earnings most, and for whom the effects are strongest. I document a concave life-cycle pattern in the payoffs to personality traits, with the largest effects between the ages of 40 and 60. An interaction of traits with education reveals that personality matters most for highly educated men. The largest effects are found for Conscientiousness, Extraversion, and Agreeableness (negative), where Conscientiousness operates partly through education, which also has significant returns.

Suggested Citation

  • Gensowski, Miriam, 2018. "Personality, IQ, and lifetime earnings," Labour Economics, Elsevier, vol. 51(C), pages 170-183.
    • Handle: RePEc:eee:labeco:v:51:y:2018:i:c:p:170-183
    DOI: 10.1016/j.labeco.2017.12.004
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    More about this item

    Keywords

    Personality traits; Socio-emotional skills; Cognitive skills; Returns to education; Lifetime earnings; Big Five; Human capital; Factor analysis;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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