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The (in)stability of locus of control: New insights from distributional effects of major life events

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  • Ha Trong Nguyen
  • Schurer, Stefanie
  • Mitrou, Francis

Abstract

Earlier empirical evidence indicates that locus on control (LoC), a non-cognitive skill reflecting an individual's belief that life's outcomes result from their own efforts, is relatively unresponsive to major life events. This study re-examines this evidence by utilizing a longer panel dataset and employing more robust econometric models. Results from an individual fixed effects model reveal that a substantial proportion of major life events exert a statistically significant influence on LoC. Additionally, individual fixed effects quantile regressions show that the effects of many life events are more pronounced for individuals at the lower end of the internal LoC distribution. The analysis also uncovers heterogeneity in the effects of life events across gender and age groups, with certain events exhibiting persistent, albeit short-term, impacts on LoC. Furthermore, we find that the effects of major life events on LoC are not only statistically significant but also economically meaningful.

Suggested Citation

  • Ha Trong Nguyen & Schurer, Stefanie & Mitrou, Francis, 2024. "The (in)stability of locus of control: New insights from distributional effects of major life events," GLO Discussion Paper Series 1532, Global Labor Organization (GLO).
    • Handle: RePEc:zbw:glodps:1532
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    References listed on IDEAS

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    1. Heckman, James J. & Kautz, Tim, 2012. "Hard evidence on soft skills," Labour Economics, Elsevier, vol. 19(4), pages 451-464.
    2. Xue, Sen & Kidd, Michael P. & Le, Anh.T. & Kirk, Kathy & Martin, Nicholas G., 2020. "The role of locus of control in adulthood outcomes: Evidence from Australian twins," Journal of Economic Behavior & Organization, Elsevier, vol. 179(C), pages 566-588.
    3. Preuss, Malte & Hennecke, Juliane, 2018. "Biased by success and failure: How unemployment shapes locus of control," Labour Economics, Elsevier, vol. 53(C), pages 63-74.
    4. Sergio Firpo & Nicole M. Fortin & Thomas Lemieux, 2009. "Unconditional Quantile Regressions," Econometrica, Econometric Society, vol. 77(3), pages 953-973, May.
    5. Andrew E Clark & Rong Zhu, 2024. "Taking Back Control? Quasi-Experimental Evidence on the Impact of Retirement on Locus of Control," The Economic Journal, Royal Economic Society, vol. 134(660), pages 1465-1493.
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    Cited by:

    1. Nguyen, Ha Trong & Mitrou, Francis, 2025. "Extreme weather events, home damage, and the eroding locus of control," Ecological Economics, Elsevier, vol. 235(C).

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    More about this item

    Keywords

    Locus of Control; Unconditional Quantile; Australia;
    All these keywords.

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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