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Interpersonal Styles and Labor Market Outcomes

  • Lex Borghans
  • Bas ter Weel
  • Bruce A. Weinberg

This paper develops a framework to understand the role of interpersonal interactions in the labor market including task assignment and wages. Effective interpersonal interactions involve caring, to establish cooperation, and at the same time directness, to communicate in an unambiguous way. The ability to perform these tasks varies with personality and the importance of these tasks varies across jobs. An assignment model shows that people are most productive in jobs that match their style and earn less when they have to shift to other jobs. An oversupply of one attribute relative to the other reduces wages for people who are better with the attribute in greater supply. We present evidence that youth sociability affects job assignment in adulthood. The returns to interpersonal interactions are consistent with the assignment model.

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File URL: http://www.nber.org/papers/w12846.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 12846.

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Date of creation: Jan 2007
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Publication status: published as Lex Borghans & Bas ter Weel & Bruce A. Weinberg, 2008. "Interpersonal Styles and Labor Market Outcomes," Journal of Human Resources, University of Wisconsin Press, vol. 43(4).
Handle: RePEc:nbr:nberwo:12846
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