Can Money Change Who We Are? Estimating the Effects of Unearned Income on Measures of Incentive-Enhancing Personality Traits

Nattavudh Powdthavee, Christopher J. Boyce () and Alex M. Wood ()
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Christopher J. Boyce: University of Manchester
Alex M. Wood: University of Manchester

No 6131, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The importance of noncognitive childhood skills in predicting higher wages is well documented in economics. This paper studies the reverse. Using surveys of lottery winners, we analyze the effects of unearned income on the Big Five personality traits. After correcting for potential endogeneity problems from prize sizes, we find that unearned income improves traits that predict pro-social and cooperative behaviors, preferences for social contact, empathy, and gregariousness, and reduces individuals' tendency toward negative emotional states: known in economics literature as incentive-enhancing personality traits. Our results support the possibility of scope for later interventions to improve the personality traits of adults.

Keywords: noncognitive skills; personality traits; lottery winners; instrumental variables; unearned income (search for similar items in EconPapers)
JEL-codes: D3 J24 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2011-11
New Economics Papers: this item is included in nep-cbe, nep-neu and nep-sea
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Citations: View citations in EconPapers (3)

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