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Does Money Change Who You Are? Quasi-Experimental Evidence on the Effects of Wage Increases on Personality

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  • Adam Ayaita

Abstract

Using the 2015 introduction of a statutory minimum wage in Germany as a quasi-experiment, I investigate the effects of wage increases on personality. The degree to which each worker’s wage is intended to be affected by the reform is used as an instrument for the relative increase in the worker’s hourly wage in a two-stage least squares estimation based on nationally representative panel data (N = 1,955 individuals). The results show no significant effects of relative wage increases on personality traits. As the confidence intervals indicate, any substantial effects of wage increases on personality are largely rejected by the results.

Suggested Citation

  • Adam Ayaita, 2022. "Does Money Change Who You Are? Quasi-Experimental Evidence on the Effects of Wage Increases on Personality," SOEPpapers on Multidisciplinary Panel Data Research 1170, DIW Berlin, The German Socio-Economic Panel (SOEP).
    • Handle: RePEc:diw:diwsop:diw_sp1170
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    References listed on IDEAS

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    More about this item

    Keywords

    Income; minimum wage; money; personality; quasi-experiment; wage;
    All these keywords.

    JEL classification:

    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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