Beyond Skills: The Role of Personality Traits in Shaping Economic Returns Amid Technological Change

Abstract

Automation and technology are rapidly disrupting the labor market. We investigated changes in the returns to occupational personality requirements---the ways of thinking, feeling, and behaving that enable success in a given occupation---and the resulting implications for organizational strategy. Using job incumbent ratings from the U.S. Department of Labor's Occupational Information Network (O*NET), we identify two broad occupational personality requirements, which we label intellectual tenacity and social adjustment. Intellectual tenacity encompasses achievement/effort, persistence, initiative, analytical thinking, innovation, and independence. Social adjustment encompasses emotion regulation, concern for others, social orientation, cooperation, and stress tolerance. Both occupational personality requirements relate similarly to occupational employment growth between 2007 and 2019. However, among over 10 million respondents to the American Community Survey, jobs requiring intellectual tenacity pay higher wages---even controlling for occupational cognitive ability requirements---and the earnings premium grew over this 13-year period. Results are robust to controlling for education, demographics, and industry effects, suggesting that organizations should pay at least as much attention to personality in the hiring and retention process as skills.

Keywords: Earnings, Personality, Non-Cognitive, Human Capital, Future of Work

JEL Classification: J21, J23, J24, J31