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Personality, Lifetime Earnings, and Retirement Wealth

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Listed:
  • Angela Lee Duckworth

    (University of Pennsylvania)

  • David R. Weir

    (University of Michigan)

Abstract

Studies of adolescents and young adults have shown that schooling impacts economic outcomes beyond its impact on cognitive ability. Research has also shown that the personality trait of conscientiousness predicts health outcomes, academic outcomes, and divorce. Using the Big Five taxonomy of personality traits, this study examines whether non-cognitive traits are related to economic success over the life course. Examining Health and Retirement Study survey data linked to Social Security records on over 10,000 adults age 50 and over, we investigate the relationship of personality traits to economic outcomes. Controlling for cognitive ability and background variables, do more conscientious and emotionally stable adults have higher lifetime earnings, and is this due to higher annual earnings, longer work lives, or both? Do more conscientious adults save a higher proportion of their earnings for retirement, and does conscientiousness of each partner in a married couple matter? Do conscientiousness and emotional stability interact such that the effects of conscientiousness are greater among less emotionally stable adults?

Suggested Citation

  • Angela Lee Duckworth & David R. Weir, 2010. "Personality, Lifetime Earnings, and Retirement Wealth," Working Papers wp235, University of Michigan, Michigan Retirement Research Center.
    • Handle: RePEc:mrr:papers:wp235
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    File URL: http://mrdrc.isr.umich.edu/publications/Papers/pdf/wp235.pdf
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    References listed on IDEAS

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    1. James Heckman & Flavio Cunha, 2007. "The Technology of Skill Formation," American Economic Review, American Economic Association, vol. 97(2), pages 31-47, May.
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    Cited by:

    1. Xu, Yilan & Briley, Daniel A. & Brown, Jeffrey R. & Roberts, Brent W., 2017. "Genetic and environmental influences on household financial distress," Journal of Economic Behavior & Organization, Elsevier, vol. 142(C), pages 404-424.
    2. Fan, Lu & Chatterjee, Swarn & Kim, Jinhee, 2022. "Young adults’ personality traits and subjective well-being: The role of perceived money management capability," Journal of Behavioral and Experimental Finance, Elsevier, vol. 35(C).
    3. Marco Angrisani & Michael D. Hurd & Erik Meijer & Andrew M. Parker & Susann Rohwedder, 2013. "Labor Force Transitions at Older Ages: The Roles of Work Environment and Personality," Working Papers wp295, University of Michigan, Michigan Retirement Research Center.
    4. Marco Angrisani & Arie Kapteyn & Erik Meijer, 2015. "Nonmonetary Job Characteristics and Employment Transitions at Older Ages," Working Papers wp326, University of Michigan, Michigan Retirement Research Center.
    5. Martie Gillen & Hyungsoo Kim, 2014. "Older Adults’ Receipt of Financial Help: Does Personality Matter?," Journal of Family and Economic Issues, Springer, vol. 35(2), pages 178-189, June.
    6. Deborah A. Cobb-Clark & Sonja C. Kassenboehmer & Mathias G. Sinning, 2013. "Locus of Control and Savings," Ruhr Economic Papers 0455, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    7. Schäfer, Konrad C., 2016. "The Influence of Personality Traits on Private Retirement Savings in Germany," Hannover Economic Papers (HEP) dp-580, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    8. Zisman, Chen & Ganzach, Yoav, 2022. "The claim that personality is more important than intelligence in predicting important life outcomes has been greatly exaggerated," Intelligence, Elsevier, vol. 92(C).
    9. Maya Haran Rosen & Ofr Pinto & Olga Kondratjeva & Stephen Roll & Aytakin Huseynli & Michal Grinstein-Weiss, 2023. "Correction to: Household Savings Decisions in Israel’s Child Savings Program: The Role of Demographic, Financial, and Intrinsic Factors," Journal of Family and Economic Issues, Springer, vol. 44(3), pages 776-776, September.
    10. Lee, Sun Youn & Ohtake, Fumio, 2018. "Is being agreeable a key to success or failure in the labor market?," Journal of the Japanese and International Economies, Elsevier, vol. 49(C), pages 8-27.
    11. Cobb-Clark, Deborah A. & Kassenboehmer, Sonja C. & Sinning, Mathias G., 2016. "Locus of control and savings," Journal of Banking & Finance, Elsevier, vol. 73(C), pages 113-130.
    12. Marco Angrisani & Michael D. Hurd & Erik Meijer & Andrew M. Parker & Susann Rohwedder, 2017. "Personality and Employment Transitions at Older Ages: Direct and Indirect Effects through Non-Monetary Job Characteristics," LABOUR, CEIS, vol. 31(2), pages 127-152, June.
    13. Shelly Lundberg, 2011. "Psychology and Family Economics," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 12(s1), pages 66-81, May.
    14. Gensowski, Miriam, 2018. "Personality, IQ, and lifetime earnings," Labour Economics, Elsevier, vol. 51(C), pages 170-183.
    15. Melchior Vella, 2024. "The relationship between the Big Five personality traits and earnings: Evidence from a meta‐analysis," Bulletin of Economic Research, Wiley Blackwell, vol. 76(3), pages 685-712, July.
    16. Mosca, Irene & McCrory, Cathal, 2016. "Personality and wealth accumulation among older couples: Do dispositional characteristics pay dividends?," Journal of Economic Psychology, Elsevier, vol. 56(C), pages 1-19.
    17. Kleine, Jens & Wagner, Niklas & Weller, Tim, 2016. "Openness endangers your wealth: Noise trading and the big five," Finance Research Letters, Elsevier, vol. 16(C), pages 239-247.
    18. Meryl Motika, 2019. "Personality Traits and Low Wealth at Retirement," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 45(3), pages 464-476, June.
    19. 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).
    20. Johnston, David W. & Kassenboehmer, Sonja C. & Shields, Michael A., 2016. "Financial decision-making in the household: Exploring the importance of survey respondent, health, cognitive ability and personality," Journal of Economic Behavior & Organization, Elsevier, vol. 132(PA), pages 42-61.

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