A dynamic model of personality, schooling, and occupational choice

Petra E. Todd, Weilong Zhang

This paper develops a dynamic model of schooling and occupational choices that incorporates personality traits, as measured by the "big five" traits. The model is estimated using the HILDA dataset from Australia. Personality traits are found to play an important role in explaining education and occupation choices over the lifecycle. Results show that individuals with a comparative advantage in schooling and white‐collar work have, on average, higher cognitive skills and higher personality trait scores. Allowing personality traits to evolve with age and with schooling proves to be important to capturing the heterogeneity in how people respond to educational policies. The estimated model is used to evaluate two education policies: compulsory senior secondary school and a 50% college tuition subsidy. Both policies increase educational attainment and also affect personality traits.

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Year of publication:	2020
Authors:	Todd, Petra ; Zhang, Weilong
Published in:	Quantitative economics : QE ; journal of the Econometric Society. - Oxford [u.a.] : Wiley, ISSN 1759-7331, ZDB-ID 2569569-1. - Vol. 11.2020, 1, p. 231-275
Subject:	Personality traits and education policies \| occupational choice \| unobserved types \| human capital investment \| dynamic discrete choice \| Berufswahl \| Occupational choice \| Bildungsinvestition \| Human capital investment \| Theorie \| Theory \| Bildungsverhalten \| Educational behaviour \| Diskrete Entscheidung \| Discrete choice \| Bildungsertrag \| Returns to education \| Humankapital \| Human capital \| Persönlichkeitspsychologie \| Personality psychology \| Bildungspolitik \| Education policy \| Persönlichkeitsmerkmal \| Personality trait