Three essays in labour economics: personality traits and labour market outcomes

This thesis explores topics concerning personality and labour market outcomes through three complementary studies, supported by an introduction and conclusion. Chapter One conducts a meta-analysis of the relationship between Big Five traits and earnings. The results reveal that openness to experience, conscientiousness, and extraversion exhibit positive correlations with earnings, whereas agreeableness and neuroticism are inversely correlated with earnings. Overall, personality has a modest-to-small effect on earnings, with variations in results depending on the econometric models used. Accounting for publication bias, socioeconomic background, and cognitive ability in models affects returns to personality. The chapter highlights the potential for omitted variable bias in estimating personality effects on earnings when crucial factors are not accounted for. Chapter Two compares fluid intelligence and personality traits among children from diverse socioeconomic backgrounds using twin data from the first wave of TwinLife. Utilising a CES production function approach, the study illustrates how parental skills, investments, and socioeconomic status influence children’s intelligence and personality development. The results underscore that children from higher SES backgrounds exhibit higher levels of intelligence, openness to experience, extraversion, and emotional stability. The findings suggest that interventions targeting parental investments and fostering desirable personality traits could significantly enhance outcomes, particularly for disadvantaged children, thereby offering a promising avenue for improving child welfare and long-term life prospects. Chapter Three investigates the behavioural dynamics of social benefit uptake. Utilising data from the first nine waves (2010-2019) of the UK Household Longitudinal Study (UKHLS) and eligibility simulations based on the UKMOD tax-benefit calculator (UKHLS-UKMOD), the study identifies significant dynamics of state dependence once initial conditions and unobserved heterogeneity are considered. While unobserved heterogeneity plays a crucial role in explaining the take-up of social benefits, personality traits and cognitive skills do not exhibit a strong and direct influence on the take-up of social benefits. The chapter concludes by discussing policy implications.