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Good personality traits in bad times: Does conscientiousness mitigate the adverse effects of graduating in a recession?

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  • Chen, Liwen
  • Wang, Guanghua

Abstract

This paper studies whether and how conscientiousness, a personality trait, helps individuals mitigate the adverse effects of graduating during a recession on early career outcomes. By analyzing college-educated individuals who graduated in the 1980s, we find that conscientiousness reduces the income losses of workers who graduated during a recession. This effect results mainly from workers’ adjustments in the labor supply. When graduating during a recession, college graduates high in conscientiousness are more likely to find full-time jobs and work more hours per week than their counterparts low in conscientiousness. Regarding the other four Big Five personality traits, while agreeableness has a modest effect on mitigating the effects of adverse labor market entry conditions on hourly wages, extraversion, openness to experience, and emotional stability do not appear to buffer against such early career losses. Additionally, cognitive ability does not offset the challenges posed by graduating during a recession.

Suggested Citation

  • Chen, Liwen & Wang, Guanghua, 2024. "Good personality traits in bad times: Does conscientiousness mitigate the adverse effects of graduating in a recession?," Labour Economics, Elsevier, vol. 91(C).
    • Handle: RePEc:eee:labeco:v:91:y:2024:i:c:s0927537124001398
    DOI: 10.1016/j.labeco.2024.102643
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    More about this item

    Keywords

    Conscientiousness; Personality; Recession; Labor market entry; Income loss;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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