Personality Psychology and Economics

Mathilde Almlund, Angela Lee Duckworth (), James Heckman and Tim Kautz ()
Additional contact information
Angela Lee Duckworth: University of Pennsylvania
Tim Kautz: Mathematica Policy Research

No 5500, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper explores the power of personality traits both as predictors and as causes of academic and economic success, health, and criminal activity. Measured personality is interpreted as a construct derived from an economic model of preferences, constraints, and information. Evidence is reviewed about the "situational specificity" of personality traits and preferences. An extreme version of the situationist view claims that there are no stable personality traits or preference parameters that persons carry across different situations. Those who hold this view claim that personality psychology has little relevance for economics. The biological and evolutionary origins of personality traits are explored. Personality measurement systems and relationships among the measures used by psychologists are examined. The predictive power of personality measures is compared with the predictive power of measures of cognition captured by IQ and achievement tests. For many outcomes, personality measures are just as predictive as cognitive measures, even after controlling for family background and cognition. Moreover, standard measures of cognition are heavily influenced by personality traits and incentives. Measured personality traits are positively correlated over the life cycle. However, they are not fixed and can be altered by experience and investment. Intervention studies, along with studies in biology and neuroscience, establish a causal basis for the observed effect of personality traits on economic and social outcomes. Personality traits are more malleable over the life cycle compared to cognition, which becomes highly rank stable around age 10. Interventions that change personality are promising avenues for addressing poverty and disadvantage.

Keywords: economic success; wages; cognitive traits; behavioral economics; personality; human development; person-situation debate (search for similar items in EconPapers)
JEL-codes: I2 J24 (search for similar items in EconPapers)
Pages: 254 pages
Date: 2011-02
New Economics Papers: this item is included in nep-cbe, nep-evo, nep-hme, nep-hpe, nep-ltv and nep-neu
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1008)

Published - published in: E.A. Hanushek, S. Machin and S. Woessman (eds). Handbook of the Economics of Education, Amsterdam: Elsevier. 2011

Downloads: (external link)
https://docs.iza.org/dp5500.pdf (application/pdf)

Related works:
Chapter: Personality Psychology and Economics (2011)
Working Paper: Personality Psychology and Economics (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp5500

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().