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Uncovering the Power of Personality to Shape Income

Author

Listed:
  • Jaap J. A. Denissen
  • Wiebke Bleidorn
  • Marie Hennecke
  • Maike Luhmann
  • Ulrich Orth
  • Jule Specht
  • Julia Zimmermann

Abstract

The notion of person-environment fit implies that personal and contextual factors interact in influencing important life outcomes. Using data from 8,458 employed individuals, we examined the combined effects of individuals' actual personality traits and jobs’ expert-rated personality demands on earnings. Results from a response surface analysis indicated that the fit between individuals’ actual personality and the personality demands of their jobs is a predictor of income. Conclusions of this combined analysis were partly opposite to conclusions reached in previous studies using conventional regression methods. Individuals can earn additional income of more than their monthly salary per year if they hold a job that fits their personality. Thus, at least for some traits, economic success depends not only on having a “successful personality” but also, in part, on finding the best niche for one's personality. We discuss the findings with regard to labor-market policies and individuals’ job-selection strategies.

Suggested Citation

  • Jaap J. A. Denissen & Wiebke Bleidorn & Marie Hennecke & Maike Luhmann & Ulrich Orth & Jule Specht & Julia Zimmermann, 2017. "Uncovering the Power of Personality to Shape Income," SOEPpapers on Multidisciplinary Panel Data Research 951, DIW Berlin, The German Socio-Economic Panel (SOEP).
    • Handle: RePEc:diw:diwsop:diw_sp951
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    References listed on IDEAS

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    1. Christopher Boyce & Alex Wood & Nattavudh Powdthavee, 2013. "Is Personality Fixed? Personality Changes as Much as “Variable” Economic Factors and More Strongly Predicts Changes to Life Satisfaction," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 111(1), pages 287-305, March.
    2. Lex Borghans & Angela Lee Duckworth & James J. Heckman & Bas ter Weel, 2008. "The Economics and Psychology of Personality Traits," Journal of Human Resources, University of Wisconsin Press, vol. 43(4).
    3. Nyhus, Ellen K. & Pons, Empar, 2005. "The effects of personality on earnings," Journal of Economic Psychology, Elsevier, vol. 26(3), pages 363-384, June.
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    5. Fletcher, Jason M., 2013. "The effects of personality traits on adult labor market outcomes: Evidence from siblings," Journal of Economic Behavior & Organization, Elsevier, vol. 89(C), pages 122-135.
    6. Gert G. Wagner & Joachim R. Frick & Jürgen Schupp, 2007. "The German Socio-Economic Panel Study (SOEP) – Scope, Evolution and Enhancements," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 127(1), pages 139-169.
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    Cited by:

    1. Cobb-Clark, Deborah A. & Dahmann, Sarah C. & Salamanca, Nicolás & Zhu, Anna, 2022. "Intergenerational disadvantage: Learning about equal opportunity from social assistance receipt," Labour Economics, Elsevier, vol. 79(C).

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