Cognitive and non-cognitive traits and the intergenerational transmission of socioeconomic inequality

Nicholas Rohde, Pravin Trivedi, Kam Ki Tang and Prasada Rao

Journal of Economic Psychology, 2023, vol. 97, issue C

Abstract: This paper studies the roles of cognitive and non-cognitive characteristics in a standard Roemerian Inequality of Opportunity (IOP) model. Using Australian microdata, we model the effects of individuals’ backgrounds and their psychological traits on two adult income variables. We find that measurable psychological traits (intelligence, locus of control, big five personality traits) are slightly more important than background characteristics (such as race, gender, social class at birth) in explaining income disparities. However, the fraction of IOP confounded by psychological factors is small (11%–12%), which suggests that background inequalities do not meaningfully reflect differences in cognitive or non-cognitive ability.

Keywords: Income inequality; Inequality of opportunity; Intergenerational mobility; Personality (search for similar items in EconPapers)
JEL-codes: D63 D91 J62 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:joepsy:v:97:y:2023:i:c:s0167487023000363

DOI: 10.1016/j.joep.2023.102635

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