nep-neu New Economics Papers
on Neuroeconomics
Issue of 2016‒11‒20
three papers chosen by

  1. Labor Outcomes during the Transition from Adolescence to Adulthood: The Role of Personality, Cognition, and Shocks in Madagascar By Sahn, David E.; Villa, Kira M.
  2. Worker Personality: Another Skill Bias beyond Education in the Digital Age By Eckhardt Bode; Stephan Brunow; Ingrid Ott; Alina Sorgner
  3. Personality and Mental Health: The Role and Substitution Effect of Emotional Stability and Conscientiousness By Wehner, Caroline; Schils, Trudie; Borghans, Lex

  1. By: Sahn, David E. (Cornell University); Villa, Kira M. (University of New Mexico)
    Abstract: There is growing evidence that noncognitive skills affect economic, behavioral, and demographic outcomes in the developed world. However, little such evidence exists from developing countries. This paper estimates the joint effect of five specific personality traits and cognition on a sequence of labor market outcomes for a sample of Malagasy individuals as they transition from adolescence to young adulthood. Specifically we model these individuals' age of entry into the labor market, labor market sectoral selection, and within sector earnings. The personality traits we examine are the Big Five Personality Traits: Openness to Experience, Conscientiousness, Extraversion, Agreeableness, and Neuroticism. Additionally, we look at how these traits interact with household-level shocks in determining their labor market entry decisions. We find that personality, as well as cognitive test scores, affect these outcomes of interest, and that their impact on labor supply is, in part, a function of how individuals respond to exogenous shocks.
    Keywords: personality, cognitive, noncognitive, returns to skills, informal sector, formal sector, labor market entry, shocks, Madagascar
    JEL: O15 O17 J16 J24 J22
    Date: 2016–11
  2. By: Eckhardt Bode (Kiel Institute for the World Economy); Stephan Brunow (Institute for Employment Research, Nürnberg); Ingrid Ott (Karlsruhe Institute of Technology and Kiel Institute for the World Economy); Alina Sorgner (Friedrich-Schiller-University Jena)
    Abstract: We present empirical evidence suggesting that technological progress in the digital age will be biased not only with respect to skills acquired through education but also with respect to noncognitive skills (personality). We measure the direction of technological change by estimated future digitalization probabilities of occupations, and noncognitive skills by the Big Five personality traits from several German worker surveys. Even though we control extensively for education and experience, we find that workers characterized by strong openness and emotional stability tend to be less susceptible to digitalization. Traditional indicators of human capital thus measure workers' skill endowments only imperfectly.
    Keywords: Worker personality, Noncognitive skills, Digital transformation, Direction of technical change, Germany
    JEL: C25 J24 O33
    Date: 2016–11–15
  3. By: Wehner, Caroline (IZA); Schils, Trudie (Maastricht University); Borghans, Lex (Maastricht University)
    Abstract: A growing number of economic studies show that low emotional stability is typically negatively related to socioeconomic outcomes, while conscientiousness predicts desirable results. However, possible mechanisms behind these relations are far less explored. Gaining insights into the mechanisms is important, because this knowledge is crucial to develop pre- and intervention programs. We address this research gap by analyzing the relation between low emotional stability and mental ill-health as well as the possible substitution effect of conscientiousness both theoretically and empirically. Using the British Cohort Study, we find that low emotional stability at ages 10 and 16 significantly predicts mental ill-health at ages 16, 26, 30, 34 and 42 and that more conscientiousness significantly mitigates the negative relation between low emotional stability and mental health. Our results suggest that particularly both low emotionally stable and low conscientious individuals are more likely to experience mental ill-health related to a reduced problem-solving ability.
    Keywords: mental health, personality differences, health inequality, child development, socioeconomic disadvantage
    JEL: D03 I12 I14 I18 I24
    Date: 2016–10

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