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Locus of Control and Low-Wage Mobility

Author

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  • Daniel D. Schnitzlein
  • Jens Stephani

Abstract

We investigate whether non-cognitive skills - in particular Locus of Control - are important determinants of the labour market processes at the low-wage margin. Based on data from the German Socio-Economic Panel, we estimate dynamic multinomial logit models with random effects and investigate whether Locus of Control influences the probability of being higher-paid or low-paid as well as the probability of escaping low wages by moving up to higher-paid employment. Our results reveal a significant amount of state dependence in low pay even after controlling for Locus of Control and other non-cognitive skills. Furthermore, compared to individuals with an external Locus of Control, individuals with a more internal Locus of Control have a significantly higher probability of being higher-paid instead of low-paid. Conditional on being low-paid, individuals with an internal Locus of Control additionally have a significantly higher probability of moving to higher-paid employment in the following year than individuals with an external Locus of Control.

Suggested Citation

  • Daniel D. Schnitzlein & Jens Stephani, 2013. "Locus of Control and Low-Wage Mobility," SOEPpapers on Multidisciplinary Panel Data Research 589, DIW Berlin, The German Socio-Economic Panel (SOEP).
  • Handle: RePEc:diw:diwsop:diw_sp589
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    References listed on IDEAS

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    Cited by:

    1. Peter Frauke H. & Spiess C. Katharina, 2016. "Family Instability and Locus of Control in Adolescence," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 16(3), pages 1439-1471, September.
    2. Nolte, Andre & Gürtzgen, Nicole, 2015. "Changing Fortunes during Economic Transition - Low-Wage Persistence before and after German Unification," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112828, Verein für Socialpolitik / German Economic Association.
    3. repec:zbw:espost:168322 is not listed on IDEAS
    4. Konrad C. Schäfer, 2016. "The Influence of Personality Traits on Private Retirement Savings in Germany," SOEPpapers on Multidisciplinary Panel Data Research 867, DIW Berlin, The German Socio-Economic Panel (SOEP).

    More about this item

    Keywords

    low-wage; wage mobility; personality; non-cognitive skills; inequality; SOEP;

    JEL classification:

    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General

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