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Two economists’ musings on the stability of locus of control

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  • Cobb-Clark, Deborah
  • Schurer, Stefanie

Abstract

Empirical studies of the role of non-cognitive skills in driving economic behavior often rely heavily on the assumption that these skills are stable over the relevant time frame. We analyze the change in a specific non-cognitive skill, i.e. locus of control, in order to directly assess the validity of this assumption. We find that short- and medium-run changes in locus of control are rather modest on average, are concentrated among the young or very old, do not appear to be related to the demographic, labor market, and health events that individuals experience, and are unlikely to be economically meaningful. Still, there is no evidence that locus of control is truly time-invariant implying that the use of lagged measures results in an errors-in-variables problem that could downward bias the estimated wage return to locus of control by as much as 50 percent. Those researchers wishing to analyze the economic consequences of non-cognitive skills should consider (i) restricting their analysis to the working-age population for whom there is little evidence of systematic change in skill levels and (ii) accounting for error in the skill measures they employ.

Suggested Citation

  • Cobb-Clark, Deborah & Schurer, Stefanie, 2011. "Two economists’ musings on the stability of locus of control," Working Paper Series 1619, Victoria University of Wellington, School of Economics and Finance.
  • Handle: RePEc:vuw:vuwecf:1619
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    File URL: http://researcharchive.vuw.ac.nz/handle/10063/1619
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. McGee, Andrew & McGee, Peter, 2016. "Search, effort, and locus of control," Journal of Economic Behavior & Organization, Elsevier, vol. 126(PA), pages 89-101.
    2. Cobb-Clark, Deborah A. & Schurer, Stefanie, 2012. "The stability of big-five personality traits," Economics Letters, Elsevier, vol. 115(1), pages 11-15.
    3. Fossen, Frank M. & Büttner, Tobias J.M., 2013. "The returns to education for opportunity entrepreneurs, necessity entrepreneurs, and paid employees," Economics of Education Review, Elsevier, vol. 37(C), pages 66-84.
    4. Viinikainen, Jutta & Kokko, Katja, 2012. "Personality traits and unemployment: Evidence from longitudinal data," Journal of Economic Psychology, Elsevier, vol. 33(6), pages 1204-1222.
    5. Brenzel, Hanna & Laible, Marie-Christine, 2016. "Does personality matter? : the impact of the big five on the migrant and gender wage gaps," IAB Discussion Paper 201626, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    6. Schurer, S. & Yong, J., 2012. "Personality, well-being and the marginal utility of income: What can we learn from random coefficient models?," Health, Econometrics and Data Group (HEDG) Working Papers 12/01, HEDG, c/o Department of Economics, University of York.
    7. Weißenberger, Martin & Caliendo, Marco & Künn, Steffen, 2013. "The Evaluation of Start-Up Subsidies for the Unemployed and the Role of Unobserved Characteristics for Matching Estimators," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79714, Verein für Socialpolitik / German Economic Association.
    8. Brown, Sarah & Taylor, Karl, 2014. "Household finances and the ‘Big Five’ personality traits," Journal of Economic Psychology, Elsevier, vol. 45(C), pages 197-212.
    9. Antecol, Heather & Cobb-Clark, Deborah A., 2013. "Do psychosocial traits help explain gender segregation in young people's occupations?," Labour Economics, Elsevier, vol. 21(C), pages 59-73.
    10. de Araujo, Pedro & Lagos, Stephen, 2013. "Self-esteem, education, and wages revisited," Journal of Economic Psychology, Elsevier, vol. 34(C), pages 120-132.

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    Keywords

    non-cognitive skills; locus of control; stability; measurement error; endogeneity; life events;

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