This paper provides evidence on the association between individuals' cognitive abilities, personality traits, and earnings. I find that cognitive skills and certain personality traits are complements. In particular, I find that cognitive skills and emotional stability are complementary, with neurotic individuals having significantly lower returns to their cognitive skills. Furthermore, my results indicate that agreeableness, neuroticism, and – surprisingly – grit are penalised significantly in the labour market; and that there is a positive relationship between conscientiousness and wages. Finally, I observe that, contrary to previous findings, women and men have similar returns to personality traits. I use well-established measures of cognitive skills and personality: namely, competence tests from the PIAAC survey to assess cognitive skills, as well as the Big Five inventory and the Grit scale to assess personality traits.

keywords: cognitive skills, personality traits, social skills, earnings

JEL codes: , ,

publication year: 2018

language : English

thematic categories :

publishing series : IBS Working Paper

publication number : 09/2018

ISSN : 2451-4373

additional information: I would like to thank Iga Magda, Piotr Lewandowski, and the participants of the IZA World Labor Conference 2018, the 2018 WIEM conference and the 4th PIAAC International Conference for helpful comments. All errors are mine.

Marta Palczyńska

Institute for Structural Research (IBS)

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