How does your personality correlate with your paycheck?

That is the topic of my latest Bloomberg column, here is one excerpt:

Gensowski revisits a data set from all schools in California, grades 1-8, in 1921-1922, based on the students who scored in the top 0.5 percent of the IQ distribution. At the time that meant scores of 140 or higher. The data then cover how well these students, 856 men and 672 women, did through 1991. The students were rated on their personality traits and behaviors, along lines similar to the “Big Five” personality traits: openness to experience, conscientiousness, extraversion, agreeableness and neuroticism.

One striking result is how much the trait of conscientiousness matters. Men who measure as one standard deviation higher on conscientiousness earn on average an extra $567,000 over their lifetimes, or 16.7 percent of average lifetime earnings.

Measuring as extroverted, again by one standard deviation higher than average, is worth almost as much, $490,100. These returns tend to rise the most for the most highly educated of the men.

For women, the magnitude of these effects is smaller…

It may surprise you to learn that more “agreeable” men earn significantly less. Being one standard deviation higher on agreeableness reduces lifetime earnings by about 8 percent, or $267,600.

There is much more at the link, and no I do not confuse causality with correlation.  See also my remarks on how this data set produces some results at variance with the signaling theory of education.  Here is the original study.

Comments

How strongly do beauty and physical attractiveness correlate with earnings? I predict that the effect may be larger for one gender than the other?

Agreeable men = cucks. Being a cuck makes you poor.

Physical attractiveness is temporary.

Conscientious people is quite probably being conscientious all their life.

In contrast, attractiveness is provided by genes but filtered by habits. At 20 you can smoke and eat trash and look good, at 30 the remaining attractive people have good health habits, at 40+ the remaining are only the very intelligent.......the conscientious.

Also, we men have it easy. With thousands of floppy guys out there, moderate exercise already puts you in a nice place on the race.

Physical attractiveness is temporary, but the experience of being attractive at a young age probably shapes you for the rest of your life. It will give you a particular set of experiences and assumptions about interpersonal interactions that won't go away even as your appearance changes.

Exactly right, probably being physically attractive helps cultivate the extroverted personality early on.

An although temporary, though not for all, attractiveness can set you up on a steeper advancement curve.

I suspect that attractive people experience a resource curse, though I also seem to remember that the association between height and income is actually an association between teenage height and adult income, working through self-confidence.

Then again maybe self-confidence is another of those traits that is more impactful for men than women.

Conscientiousness and extroversion are very obvious workplace assets, so I don't find this very surprising. It is nice to see data that confirms it, though (and the size of the effect is quite large, especially considering how much people often change between grade school and adulthood).

The finding on agreeability is more surprising (to me, anyway). While "nice guys finish last" is a popular saying, I have never really believed that. I think being nice is usually in one's self interest. But, perhaps I'm wrong. Or maybe the problem isn't niceness itself, but other traits that might be associated with it, like passivity or fear of conflict.

Also, I wonder how applicable the results from a high-IQ cohort are to a broader population? It might be that being agreeable is a negative for very high-performing individuals, but a positive for people closer to the average.

While "nice guys finish last" is a popular saying, I have never really believed that.

Agreeableness also includes a tendency to conform with the group and 'go along to get along'. That's probably not a recipe for successful entrepreneurship. But it probably works a lot better in bureaucratic organizations. So I wonder if the same results would hold for those born in more recent decades vs those born in the 1920s? On the other hand, there was a lot of hand-wringing in the 1950s about excessive conformity ('The Organization Man'), so who knows -- maybe agreeableness is a greater disadvantage now.

As I mention below, I think this result is misleading.

Agreeableness is desirable, but not when it stems from lack of smarts / originality.

We need to control for that when we assess agreeableness

The study also takes in account IQ and openness, then it controls for smarts/originality

'Agreeableness' is one of the 'Big 5' personality traits and the instruments are well-defined, I think -- I don't think it's going to change. But it's certainly worth keeping in mind what 'Agreeableness' means and that there are downsides.

People who score low on agreeableness are probably more willing to challenge their bosses, ask for a raise, and move to another job with higher pay if they don't get their way. Agreeable people may be more liked by team members, but would guess they tend to be more complacent, satisfied with the status quo, and willing to stay in the same role.

I think career priorities i.e. making money, doing something meaningful, doing something interesting probably correlate with personality as well, confounding this result.

A curious thing in this study (or at least of a similar study of 2011 about the same issue and by the same author - http://conference.iza.org/conference_files/CoNoCoSk2011/gensowski_m6556.pdf) is that IQ has a positive relation with income but the personality traits that are stereotypical more associated with high IQ - introversion and openness - have a negative relation (although non-significant in the case of oppenness).

Hi Tyler. I'm a bit surprised you call this the "first word" on the topic. Heckman has done extensive work on personality traits and career outcomes and see also this study from 2006 which also finds a negative association between agreeableness and income for men: https://www.jstor.org/stable/pdf/25067572.pdf ("Estimating the Effect of Personality on Male and Female Earnings" by Gerrit Mueller and Erik Plug).

Has our host been watching Jordan Peterson videos? He seems to be popularizing these concept - with the attendant confusion of causality and causation.

Cowen channeling Peterson

" with the attendant confusion of causality and causation."

Clearly someone who didn't read the entire article.

No mention of how neuroticism figures here. I'd expect to see a direct correlation of neuroticism with intelligence.

Coates, et al. 2009 showed that high prenatal T (associated with greater confidence and aggression) were tied to higher incomes for bond traders. More extensive work by your colleague, Nye, et al. 2017 for Russia indicated that higher prenatal T was correlated with higher incomes even correcting for age, gender, and occupational choice thus going beyond the selection effects you mention as a possible cause in your article.

Then shouldn't introversion, low conscientiousness, and agreeableness be considered in intersectionality?

Introversion surely should be - interoverts are probably one of the more relevant oppressed and forgotten group.

Personality traits do matter to Social justice Warriors. They are all very high in neuroticism. It is that neuroticism that drives them to be SJW. Whether they were born with dark or light skin, a penis or a vagina, is fairly superficial. That they were born unhappy and need to externalize that on to the patriarchy is what matters.

I think the "Agreeableness" result is misleading as it is probably correlated with something else.

Maybe "lack of originality" or "incisive thinking", too much of a herd mindset.

If you control for that, you will find agreeableness to have a positive impact on earnings

You might be on to something, but a lot of really successful people are quite "disagreeable".

I think it is a very loosely defined word.

If you say that speaking your mind matters at workplace, then yes, I'd say disagreeableness can be positive.

But disagreeableness can also mean being rude, being impolite, being abrasive - I don't think those traits help at the workplace if you control for everything else.

The study controls for "openness", who is associated with "originality" - although not significant, the sign for "openness" is also negative (meaning that, not only "agreable" people earn less, but "original" people also earn less).

IQ is still predictive even with the extreme restriction of range. Malcolm Gladwell BTFO'd.

Men who are smart, hard working, and are able to build social networks make more money. Not a big surprise.

Of course these subjects had a unique set of life expereineces. They lived through the Great Depression, WW II, the post war boom etc., all while, I assume, living the majority of their lifes in California.

The character traits in New York or the Midwest that aide advancement might be different. The character traits required in a different time period or a different type of economy might differ. The skills needed to advance in the aerospace industries in the 50's could be very different from the skills need in silicone valley or finance today.

Females gained less income from being hard working and extroverted. But they could have gained status, power, or increased flexibility within the careers then open to them. They could have risen to the top of "female" professions without earning comperable cash incomes to males.

The type of specialized knowledge that is often needed in top performers in today's economy maybe very different than it was in an earlier time and place. Medicine is far more complex at the top today. An ability to compete with international firms is much tougher at the top.

Yet for most workers in today's economy success or failure is determined by character traits. The skills in the marketplace seem to be sort of bell shaped with a long right tail. What sets those in the middle apart is not intelligence but character traits. Looking at top performers might be interesting but it kind of ignores the vast majority.

Tyler Cowen
channeling
Jordan Peterson

I suppose my question is along the lines of, why the preoccupation with success prediction?
We see a recurring pattern here of articles about IQ and success, personality and success...

It looks like a yearning to find some "success" key, some sort of magic sorting hat that can identify and categorize people.

That underlying desire is more informative than the actual studies.

"no I do not confuse causality with correlation."
But are you denying causality?

Smoking causes cancer, not merely correlates. But not in all people.
Even bullets in the head, which cause death, don't always cause death.

Google says: "Causation indicates a relationship between two events where one event is affected by the other. In statistics, when the value of one event, or variable, increases or decreases as a result of other events, it is said there is causation."

I think conscientiousness is causing higher income, as does extroversion -- with agreeableness causing lower income.

These Big 5 traits are "named", but the idea is that the personality trait has a causal influence -- that's where these divisions come from. (I like and am more familiar with Myers-Briggs 4-pairs, as an xNTP).

I'm more interested in Psychopathy, which isn't included in the Big 5, but is included in HEXACO as the opposite of the Honesty-humility factor.

Agreeableness is more about conformity and patience with others, rather than Psychopathy.

I am very agreeable but have done well in earning money but one of my thoughts is that if you are very agreeable you might not care so much how much money you make.

My estimation is that personality has higher impact in the later career stages. Agreeableness is probably even more of a negative after age 45 of 50, and extraversion is even more important.

Being agreeable makes you a sucker?

I am super cool and nice, but I earn very little.
Come to think of it, maybe I am cool and nice because of that.

Good point! Causality reversed.
People are agreeable when they are in the lower echelons of an organization. As they rise to the top they have less need to be agreeable to others. Thus, earning more money makes you less agreeable, not the other way around.
Excellent insight!

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