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Personality and Earnings

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  • Kaye K. W. Lee

Abstract

This paper studies personality as a potential explanation for wage differentials between apparently similar workers. This follows initial studies by Jencks (1979) that suggest that certain personality traits, such as industriousness and leadership, have an impact on earnings. The paper aims to provide a theoretical framework within which these effects may be analyzed. The study begins by outlining four issues as a backdrop to the model: rationality, the industry, firms, and workers. A crucial factor to the model is the memeÑa mental gene that affects personality. Taking these four factors into consideration, the Contested Exchange model from Bowles and Gintis (1990) is used. Then, it is adapted to study memetic effects on the wage rate. This is followed by an analysis of how memes may affect personality and thus earnings. The issues that require further study and resolution are 1) which traits create wage differentials, and 2) two-way causality: does personality affect the wage, or does a wage premium become an incentive for a person to adopt new memes?

Suggested Citation

  • Kaye K. W. Lee, 2006. "Personality and Earnings," Economics Working Paper Archive wp_443, Levy Economics Institute.
    • Handle: RePEc:lev:wrkpap:wp_443
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    References listed on IDEAS

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    3. Herbert Gintis & Samuel Bowles & Melissa Osborne, 2001. "Incentive-Enhancing Preferences: Personality, Behavior, and Earnings," American Economic Review, American Economic Association, vol. 91(2), pages 155-158, May.
    4. Samuel Bowles & Herbert Gintis, 1990. "Contested Exchange: New Microfoundations for the Political Economy of Capitalism," Politics & Society, , vol. 18(2), pages 165-222, June.
    5. Herbert A. Simon, 1955. "A Behavioral Model of Rational Choice," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 69(1), pages 99-118.
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    8. Lawrence F. Katz & Lawrence H. Summers, 1989. "Industry Rents: Evidence and Implications," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 20(1989 Micr), pages 209-290.
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    Cited by:

    1. Kevin Denny & Wen Zhang, 2010. "In praise of ambidexterity: how a continuum of handedness predicts social adjustment," Working Papers 201019, Geary Institute, University College Dublin.

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