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