Abstract
Using three waves (2005, 2009 and 2013) of the Household, Income and Labour Dynamics in Australia Survey (HILDA), and linear regression and probit analyses, we examined the relationship between personality and own earnings, spousal earnings, and marriage. Specifically, we were interested in whether an individual’s personality traits re predictive of these three outcomes. As part of these analyses, we first established that adult personality was stable diminishing the probability of reverse causality. Our empirical results confirmed previous findings on the effect of own personality on own earnings. We then turned to the effect of spousal personality on earnings, the first study to examine this by gender. Regression estimates indicated that for men, having a conscientious wife was positively correlated with his earnings. There was some evidence that having an extraverted husband complement a woman’s earnings. These results highlight the importance of non-cognitive skills on earnings and emphasize the value of looking separately by gender. We also found that personality traits played an important factor in how people match in the marriage market, underscoring an important link between the marriage market and the labor market.
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Notes
Benefits from specialization accrue when one spouse specializes in home production and the other in market work. Joint consumption is defined as the benefits couples receive from complementarities in consumption of household public goods and time.
The idea of spousal characteristics spilling over onto own outcomes is not novel nor is it limited to labor market or personality characteristics. For example, Fletcher (2009) examines spillover effects from spousal mental illness to one’s own mental health while Bubonya et al. (2017) look at the effect of spousal job loss on mental health and there is evidence also that spousal characteristics affects one’s own health (Monden et al. 2003).
See https://www.studyinaustralia.gov.au/english/australian-education/education-system for greater discussion of the educational levels in Australia. In particular, year 12 is the completion of secondary education. See https://www.tafecourses.com.au/resources/guide-to-tafe-courses-in-australia/ for a discussion of vocational/technical certificates and diplomas which includes both Certificates III and IV and Diploma.
The HILDA survey asks “About how many hours do you spend on housework in an average week, such as time spent cooking, cleaning and doing the laundry?” The decision making index contains seven questions about how households make decisions about social life, raising children, spending and making large purchases, and how much time to spend in paid work.
We test to see if there are differences between cohabiting versus married couples and discuss these results later in the paper.
See https://www.studyinaustralia.gov.au/english/australian-education/education-system for greater discussion of the educational levels in Australia. In particular, year 12 is the completion of secondary education. See https://www.tafecourses.com.au/resources/guide-to-tafe-courses-in-australia/ for a discussion of vocational/technical certificates and diplomas which includes both Certificates III and IV and Diploma. The omitted category in our regressions is the highest education level (Postgrad—masters/doctorate).
We created this variable by dividing weekly earnings by weekly hours as they suggested by HILDA.
Our data are measured at the individual level, not the dyad level. Thus, it is most appropriate to cluster the standard errors by individual.
These results are available in the Online Appendix Table 2.
We also ran these regressions without the occupational dummy variables and the results were largely unchanged. These results are available upon request. Controlling for occupation allows us to show how personality can help explain some of the remaining ‘unexplained variation’ in hourly earnings which is our main question.
All appendix tables discussed are available online.
Another way to deal with the endogeneity of spousal personality in the own hourly earnings equation would be to use an Instrumental Variables estimator. Such an approach would require an instrument that was correlated with spousal personality but not with the own hourly earnings. Unfortunately, we did not have such an instrument. An ideal instrument would randomize individuals into marriage making their spouse’s personality exogenous.
The regression results for the interaction marginal effects are shown in Online Appendix Table 6.
There is a large literature on the detrimental effect of housework on earnings particularly for women (e.g. Maani and Cruickshank 2010; Hersch 2009). Our measure of decision making was included to allow for differential bargaining power which others have found may also influence the allocation of household time. For example, Flinn et al. (2018) found using the HILDA data that personality was an important predictor of household bargaining power.
Lower values of this index indicate that the individual whose wages are the dependent variable is more likely to make household decisions.
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Acknowledgements
We thank our research assistant, Enfeng Zhou, for invaluable help and Andrew Hussey, Terra McKinnish and Allan Zebedee for helpful comments on earlier drafts of this paper as well as participants at the 2018 SEHO meetings, the 2017 PAA meetings and the 2017 SEA meetings.
Funding
This paper uses unit record data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey. The HILDA Project was initiated and is funded by the Australian Government Department of Social Services (DSS) and is managed by the Melbourne Institute of Applied Economic and Social Research (Melbourne Institute). The findings and views reported in this paper, however, are those of the authors and should not be attributed to either DSS or the Melbourne Institute.
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Appendices
Appendix 1
Definitions of the Big Five Characteristics (These are adapted from: https://www.psychometric-success.com/personality-tests/personality-tests-big-5-aspects.htm. Accessed 3/20/2017)
Extraversion
Extraversion is defined by pronounced engagement with the external world. Extraverts enjoy being with people, are energetic, and frequently experience positive emotions. They tend to be enthusiastic, action-oriented, individuals. In group settings they like to talk, assert themselves, and draw attention to themselves.
Agreeableness
Agreeableness reflects individual differences in concern with cooperation and social harmony. Agreeable individuals place a premium on getting along with others. They tend to be considerate, friendly, generous, helpful, and willing to compromise. Agreeable people have an optimistic view of human nature.
Conscientiousness
Conscientiousness concerns the way in which we control, regulate, and direct our impulses both bad and good. Impulses are not inherently bad; occasionally time constraints require a snap decision, and acting on our first impulse can be an effective response. Also, in times of play rather than work, acting spontaneously and impulsively can be fun. Impulsive individuals can be seen by others as colorful and fun-to-be-with.
Neuroticism (Converse is Emotional Stability)
Neuroticism refers to the tendency to experience negative feelings. People with neuroticism tend to have more depressed moods. They often suffer from feelings of guilt, envy, anger and anxiety, more frequently and more severely than other individuals.
Openness to Experience
Open people are intellectually curious, have an advanced appreciation of art, and are sensitive to beauty. They tend to be more aware of their feelings and to act in individualistic and nonconforming ways. Intellectuals typically score high on Openness to Experience; consequently, this factor has also been called Culture or Intellect.
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Averett, S.L., Bansak, C. & Smith, J.K. Behind Every High Earning Man is a Conscientious Woman: The Impact of Spousal Personality on Earnings and Marriage. J Fam Econ Iss 42, 29–46 (2021). https://doi.org/10.1007/s10834-020-09692-x
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DOI: https://doi.org/10.1007/s10834-020-09692-x