Personality and Life-Cycle Labour Earnings

Teresa Backhaus () and Mattis Beckmannshagen ()

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: Labour market inequality over the life cycle reflects differences not only in wages, but also in employment stability, and career progression. While a large liter ature documents that personality traits predict wages and other labour market out comes, little is known about how they shape accumulated earnings over the working life. This paper studies the relationship between personality traits, risk preferences, locus of control, and accumulated labour earnings up to age 45. We combine German administrative social-security records with long-running survey data, allowing us to link complete employment and earnings biographies to established measures of personality. We show that personality traits are strongly associated with long-run earnings, but through different mechanisms. Conscientiousness and an internal locus of con trol are positively related to accumulated earnings, whereas agreeableness, neuroticism, and, particularly for women, extraversion are negatively associated with earnings accumulation. Decomposing accumulated earnings into wage and employ ment components reveals substantial heterogeneity in the channels through which personality shapes long-run outcomes. The results highlight that the role of person ality for economic success cannot be fully understood from cross-sectional wage measures alone.

Keywords: life cycle; earnings; personality traits; Big Five; employment trajectories (search for similar items in EconPapers)
JEL-codes: D91 J31 J60 (search for similar items in EconPapers)
Pages: 58
Date: 2026-06
New Economics Papers: this item is included in nep-hrm, nep-lab and nep-lma
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