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The Returns to Cognitive Abilities and Personality Traits in Germany

SOEPpapers 124, 45 S.

Guido Heineck, Silke Anger


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Published in: Labour Economics 17 (2010) 3, 535-546


We provide the first joint evidence on the relationship between individuals' cognitive abilities, their personality and earnings for Germany. Using data from the German Socio-Economic Panel Study, we employ scores from an ultra-short IQ-test and a set of measures of personality traits, namely locus of control, reciprocity and all basic items from the Five Factor Personality Inventory. Our estimates suggest a positive effect of so-called fluid intelligence or speed of cognition on males' wages only. Findings for personality traits are more heterogeneous. There however is a robust wage penalty for an external locus of control for both men and women.

JEL-Classification: J24;J31;I21
Keywords: Cognitive abilities, personality traits, Five Factor Model, Locus of control, reciprocity, wages
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