How Your Personality Affects Your Paycheck
A study of earnings data suggests that extroverts are paid more, and "agreeable" men get less.
By Tyler Cowen
August 9, 2018

What makes really smart people tick? Why do some end up earning so much more than others? And how much do these disparate outcomes have to do with their personalities? A new study by Miriam Gensowski, at the University of Copenhagen, sheds fascinating light on these and other questions.

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 (for one thing, women earned less because of restricted opportunities). Furthermore, extroversion is more strongly correlated with higher earnings than is conscientiousness, unlike for the men.

The study is

Personality, IQ, and lifetime earnings
by Miriam Gensowski
This paper estimates the effects of personality traits and IQ on lifetime earnings of the men and women of the Terman study, a high-IQ U.S. sample. Age-by-age earnings profiles allow a study of when personality traits affect earnings most, and for whom the effects are strongest. I document a concave life-cycle pattern in the payoffs to personality traits, with the largest effects between the ages of 40 and 60. An interaction of traits with education reveals that personality matters most for highly educated men. The largest effects are found for Conscientiousness, Extraversion, and Agreeableness (negative), where Conscientiousness operates partly through education, which also has significant returns.

I wonder if conscientiousness or extraversion can be instilled and how disagreeable you want your children to be smile.