The (in)stability of locus of control: New insights from distributional effects of major life events

Earlier empirical evidence indicates that locus on control (LoC), a non-cognitive skill reflecting an individual's belief that life's outcomes result from their own efforts, is relatively unresponsive to major life events. This study re-examines this evidence by utilizing a longer panel dataset and employing more robust econometric models. Results from an individual fixed effects model reveal that a substantial proportion of major life events exert a statistically significant influence on LoC. Additionally, individual fixed effects quantile regressions show that the effects of many life events are more pronounced for individuals at the lower end of the internal LoC distribution. The analysis also uncovers heterogeneity in the effects of life events across gender and age groups, with certain events exhibiting persistent, albeit short-term, impacts on LoC. Furthermore, we find that the effects of major life events on LoC are not only statistically significant but also economically meaningful.