Wage premia for skills: The complementarity of cognitive and non-cognitive skills

19 December 2018

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
Publications category: 
publishing series: IBS Working Paper
publication number: 09/2018
ISSN: 2451-4373
Additional information:

This work was supported by the Polish National Science Centre (grant number 2017/27/B/HS4/01201).

Published in:

International Journal of Manpower (2020).

Projects related to this publication:

Institute for Structural Research (IBS)

Skip to content