Personality, education and earnings

Abstract

Economists are only beginning to understand the relationship between personality traits and economic outcomes. This paper examines the influence of childhood social maladjustment on cognitive development, labor market earnings and career progression using longitudinal data drawn from the National Child Development Study. Net of differences in family background and early cognitive ability, compelling evidence is presented that demonstrates social maladjustment scores are strongly associated with success and failure in education and the labor market.

Keywords:

• education
• earnings
• personality

Notes

1. The wages reported in the NCDS are somewhat cumbersome. Respondents were asked their usual weekly hours, their net and gross pay, and their pay interval. We first calculate the number of hours in the pay interval by examining the usual weekly hours, and then calculate the hourly pay rates by taking the pay reported and dividing by the number of hours in the pay interval. We focus on gross pay only and wages are deflated at 2000 prices.

2. In Table A2 the variable labeled passive aggression is a variable comprised of depression, hostility towards adults, writing off adults, miscellaneous symptoms, and miscellaneous nervous symptoms. It has been scaled to range from 0 to 10. The variable labeled non‐passive aggression is a variable made up of hostility towards children, restlessness and inconsequential behaviour. It has also been scaled to range from 0 to 10. Symptoms that fluctuate in sign across the wage/career progression equations are excluded from this analysis, as their inclusion only had a trivial effect on outcomes.

3. Some 75% of the variation in scores can be explained by the first factor.

4. Individuals who were in care as children were also dropped from our sample.

5. Table A4 in the Appendix presents these results separately for men and women.

6. Table A5 in the Appendix presents these results separately for men and women.

7. Table A5 in the Appendix presents these results separately for men and women. No important differences on the social maladjustment variables are observed.

8. Earlier work has shown that some aspects of aggression ‘Machiavellian intelligence’ and non‐‘agreeableness’ appear to be rewarded in the labor market (see, for example, Mueller and Plug 2006; Bowles, Gintis, and Osborne 2001)

9. This argument is presented in Lazear (1989).

10. See for example, Borghans et al. (2008), Krueger and Schkade (2007) and Waddell (2006).

11. Bouchard and Loehlin (2001), for example, reviewing a large number of twin studies, found that 40–60% of the variation in personality is attributable to genetic differences between individuals.