The Returns to Personality Traits across the Wage Distribution
No 921, SOEPpapers on Multidisciplinary Panel Data Research from DIW Berlin, The German Socio-Economic Panel (SOEP)
This paper investigates heterogeneous wage effects of non-cognitive skills across the wage distribution. I develop a model of wage determination under uncertainty with respect to individual productivity based on three components (minimum wages, productivity premiums, bargaining premiums). Based on this model, I expect (i) a larger importance and (ii) larger effects of non-cognitive skills for high-wage employees compared to their low-wage counterparts. I test these hypotheses with unconditional quantile regressions using large-scale survey data from Germany, the UK, and Australia. To test the joint explanatory contribution of multiple variables within a quantile-regression framework, I propose a new statistic that quantifies the rise in explanatory power generated by additional explanatory variables. The findings indicate a rising importance as well as increasing effects of certain personality traits (agreeableness, neuroticism and risk taking) across the wage distribution for full-time employed males and females.
Keywords: non-cognitive skills; personality traits; unconditional quantile regression (search for similar items in EconPapers)
JEL-codes: C21 J24 J31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ecm, nep-hrm and nep-lma
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Persistent link: https://EconPapers.repec.org/RePEc:diw:diwsop:diw_sp921
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