TY - UNPB
T1 - Personality, IQ, and Lifetime Earnings
AU - Gensowski, Miriam
N1 - JEL classification: J24, I24, J16
PY - 2014/6
Y1 - 2014/6
N2 - Talented individuals are seen as drivers of long-term growth, but how do they realize their full potential? In this paper, I show that lifetime earnings of high-IQ men and women are substantially influenced by their personality traits, in addition to intelligence and education. Personality traits, as identified in a factor model, significantly affect earnings, but not for young workers. The effects are furthermore heterogeneous by educational attainment. For women, personality traits do not affect family earnings in the same way as own earnings. Personality and IQ also influence earnings indirectly through education, which has sizeable positive rates of return for men in this sample. Women’s returns to education past a bachelor’s degree are lowered through worse marriage prospects, which offset gains to education in terms of own earnings. The causal effect of education is identified through matching on detailed background information. This paper complements the literature on investments in education and personality traits by showing that they also have potentially high returns at the high end of the ability distribution.
AB - Talented individuals are seen as drivers of long-term growth, but how do they realize their full potential? In this paper, I show that lifetime earnings of high-IQ men and women are substantially influenced by their personality traits, in addition to intelligence and education. Personality traits, as identified in a factor model, significantly affect earnings, but not for young workers. The effects are furthermore heterogeneous by educational attainment. For women, personality traits do not affect family earnings in the same way as own earnings. Personality and IQ also influence earnings indirectly through education, which has sizeable positive rates of return for men in this sample. Women’s returns to education past a bachelor’s degree are lowered through worse marriage prospects, which offset gains to education in terms of own earnings. The causal effect of education is identified through matching on detailed background information. This paper complements the literature on investments in education and personality traits by showing that they also have potentially high returns at the high end of the ability distribution.
KW - Faculty of Social Sciences
KW - lifetime earnings
KW - returns to education
KW - cognitive skills
KW - social skills
KW - Big Five
KW - factor analysis
KW - human capital
M3 - Working paper
T3 - IZA Discussion Paper
BT - Personality, IQ, and Lifetime Earnings
ER -