In a recent paper, I investigate these questions by looking at the connection between personality traits and lifetime earnings among men at different ages. The overall effect of personality on lifetime earnings is large – in the same order of magnitude as the average lifetime earnings difference between high school and college graduates in my sample: over $1.2 million. The benefit of linking earnings later in life to personality measured at a young age is that it makes us more confident that the association between personality traits and earnings did not arise because someone who got a lucky draw with high income became more extroverted as a result. To analyze how people’s lifetime earnings are influenced by their personality traits, I statistically compared men with equal IQ, parental characteristics, and childhood conditions, at each age. I attributed the remaining differences in earnings of otherwise equal men to differences in scores on personality traits. If we look at data of very young workers, we could erroneously conclude that personality traits do not matter for earnings. The personality traits that have the strongest association with lifetime earnings in Terman are exactly the same traits that are found to be most important for wages among today’s workers.
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