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Conscientiousness Matters: How does Personality affect Labor Market Outcomes?

Author

Listed:
  • Justine Herve

    (Stevens Institute of Technology)

  • Helene Purcell

    (University of Pennsylvania)

  • Subha Mani

    (Fordham University, Department of Economics)

Abstract

Personality traits play an important role in shaping labor market outcomes, but the associated behaviors that lead to these differences are understudied. In this paper, we examine the returns to the Big Five personality traits as well as the mechanisms through which personality affects employment and earnings. We find conscientiousness to be a significant predictor of both employment and earnings. We further show that the association between conscientiousness and earnings operates primarily through one specific behavior, namely, individual effort. Additionally, we can eliminate job characteristics and collective bargaining as potential channels for the positive relationship between conscientiousness and earnings.

Suggested Citation

  • Justine Herve & Helene Purcell & Subha Mani, 2023. "Conscientiousness Matters: How does Personality affect Labor Market Outcomes?," Fordham Economics Discussion Paper Series dp2023-05er:dp2023-05, Fordham University, Department of Economics.
    • Handle: RePEc:frd:wpaper:dp2023-05er:dp2023-05
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    More about this item

    Keywords

    Big Five personality traits; Conscientiousness; Labor market returns; Effort;
    All these keywords.

    JEL classification:

    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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