Estimating the Effect of Personality on Male-Female Earnings

Gerrit Mueller () and Erik Plug ()
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Gerrit Mueller: ZEW Mannheim

No 1254, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper uses the Five-Factor Model of personality structure as an organizing framework to explore the effects of personality on earnings. Using data from a longitudinal survey of American high school graduates, we find that extroversion, agreeableness, conscientiousness, neuroticism and openness to experience are rewarded/penalized significantly and differentially across genders. Antagonistic, emotionally stable and open men enjoy substantial earnings advantages over otherwise similar individuals. In case of women, the labor market appears to value conscientiousness and openness to experience. The positive returns to openness are very similar across genders, suggesting that being creative, unconventional and artistic is equally important for men and women working in all types of occupations. Moreover, we find significant gender differences in personality characteristics. Decomposition of personality-based earnings differentials into trait and parameter effects suggests that gender-atypical traits reduce the earnings advantage that individuals would otherwise enjoy under their own-sex wage structure. Overall, we find that the impact of personality on earnings is significant but not large – not trivial either – and comparable to the impact of differences in cognitive ability.

Keywords: personality and wages; gender wage gap (search for similar items in EconPapers)
JEL-codes: J16 J31 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2004-08
New Economics Papers: this item is included in nep-cbe
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Citations: View citations in EconPapers (18)

Published - published as 'Estimating the Effect of Personality on Male and Female Earnings ' in: Industrial and Labor Relations Review, 2006, 60 (1), 3-22

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Working Paper: Estimating the Effect of Personality on Male-Female Earnings (2005)
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