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Explaining personality pay gaps in the UK

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Using the British Household Panel Survey we estimate the effect on pay of each of the Big Five personality traits for employed men living in the UK. We add to the existing literature by estimating the role of factors such as education and occupation in explaining personality pay gaps, by allowing the personality traits to affect wage differently across occupations, education levels and other workers characteristics, and by investigating personality pay gaps for high- and low-paid workers. We find that openness to experience is the most relevant personality trait in explaining wages, followed by neuroticism, agreeableness, extroversion and conscientiousness. Openness and extroversion are rewarded while agreeableness and neuroticism are penalized, but the openness pay gap is totally explained by differences in worker characteristics, particularly education and occupation.
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Keywords: C21; J31; J71; big five; decomposition; noncognitive skills; personality traits; wage gap

Document Type: Research Article

Affiliations: 1: Institute for Social and Economic Research (ISER), University of Essex, Colchester, CO4 3SQ, UK 2: Department of Economics and Related Studies, University of York, Heslington, York, YO10 5DD, UK

Publication date: 2014-09-12

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