The Returns to Cognitive Abilities and Personality Traits in Germany

Heineck, Guido; Anger, Silke

doi:10.2139/ssrn.1259705

The Returns to Cognitive Abilities and Personality Traits in Germany

SOEP Paper No. 124

DIW Berlin Discussion Paper No. 836

48 Pages Posted: 27 Aug 2008 Last revised: 29 Jun 2009

See all articles by Guido Heineck

Guido Heineck

University of Bamberg; IZA Institute of Labor Economics

Silke Anger

Government of the Federal Republic of Germany - Institute for Employment Research (IAB); German Institute for Economic Research (DIW Berlin)

Date Written: August 1, 2008

Abstract

We provide the first joint evidence on the relationship between individuals' cognitive abilities, their personality and earnings for Germany. Using data from the German Socio-Economic Panel Study, we employ scores from an ultra-short IQ-test and a set of measures of personality traits, namely locus of control, reciprocity and all basic items from the Five Factor Personality Inventory. Our estimates suggest a positive effect of so-called fluid intelligence or speed of cognition on males' wages only. Findings for personality traits are more heterogeneous. There however is a robust wage penalty for an external locus of control for both men and women.

Keywords: Cognitive abilities, personality traits, Five Factor Model, Locus of control, reciprocity, wages

JEL Classification: J24, J31, I21

Suggested Citation: Suggested Citation

Heineck, Guido and Anger, Silke, The Returns to Cognitive Abilities and Personality Traits in Germany (August 1, 2008). SOEP Paper No. 124, DIW Berlin Discussion Paper No. 836, Available at SSRN: https://ssrn.com/abstract=1259705 or http://dx.doi.org/10.2139/ssrn.1259705