Is Being Agreeable a Key to the Success or Failure in the Labor Market?

The main purpose of this paper is to study how the individual differences in non-cognitive skills, as measured by Big-Five personality traits, explain the variation in labor market outcomes. By analyzing the Japanese and US survey data, this study attempts to analyze how personality traits are associated with labor market outcomes in these two countries. We focus on the existence of country-specific non-cognitive determinants of later outcomes, which is found in agreeableness in relation to male schooling and earnings. With respect to years of schooling and annual income, agreeableness seems to contribute to the later outcomes of Japanese men, while it acts as a penalty for American men. However, in both countries, we found that higher agreeableness is likely to be translated into higher earnings for those who work for large-sized companies with more than 1000 employees in comparison to small-sized companies. Agreeableness is rewarded through earnings but it does not necessarily lead to a career promotion. Furthermore, the premium of agreeableness still exists when labor-related variables such as occupation choice and labor hours are controlled for. This suggests that agreeableness might act as part of skill-sets that directly improve job performance and productivity in large-sized companies.