The economics of global personality diversity

Paul X. McCarthy, Xian Gong, Marieth Coetzer, Marian-Andrei Rizoiu, Margaret L. Kern, John A. Johnson, Richard Holden and Fabian Braesemann

Papers from arXiv.org

Abstract: Understanding why national economic performance differs remains a central question in economics. Although institutions and demographic diversity are established correlates of economic development, the contribution of within-population personality diversity has received limited attention. We introduce the Global Personality Diversity Index ($\Psi$-GPDI), a measure of psychological heterogeneity derived from assessments of 760,242 individuals across 135 countries using 30 facets of the Big Five personality traits. We show that most variation in these facets occurs within rather than between countries. Across countries with available economic data, personality diversity is positively associated with GDP per person employed, accounting for 19.9% of the variance in an adjusted single-predictor model. Including $\Psi$-GPDI alongside institutional quality and immigrant diversity increases the model's explanatory power by approximately 5.7%. Personality diversity is also weakly correlated with immigrant diversity, suggesting that the two measures capture distinct characteristics of national populations. These findings identify psychological heterogeneity as a potentially important and previously underexamined dimension of national human capital. Although the observational design does not establish causality, the results motivate further investigation of how personality diversity interacts with institutions, occupational specialization, and economic development.

Date: 2025-03, Revised 2026-10
New Economics Papers: this item is included in nep-gro and nep-inv
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