Personality and Response to the Financial Crisis

In a previous study, we found the family of personality traits known as conscientiousness to be associated in cross-sectional analyses with both lifetime earnings and wealth. In this study, we used data from an Internet survey of HRS respondents in the second quarter of 2009 to test whether conscientiousness and other Big Five factors prospectively predicted responses to the financial crisis of 2008/09. In addition, to improve the targeting and design of behavioral interventions for “at-risk” individuals, we examined two specific facets of conscientiousness (i.e., self-control and perseverance) that may be more highly related to these economic outcomes than other facets. Finally, we used data from the Consumption and Activities Mail Survey (CAMS) to examine whether personality is related to the proportion of income saved vs. spent. Missing data precluded sufficiently powerful prospective analyses of personality and responses to the financial crisis. Likewise, data on self-control and perseverance from the 2010 experimental module were not sufficient at the time of final reporting to come to definitive conclusions about how these facets relate to economic outcomes. We did find that conscientious adults save more and spend less of their incomes, whereas adults who are higher in openness to experience (e.g., adventurous, sophisticated) save less and spend more of their income. The robust associations between conscientiousness and economic outcomes suggests further investigation of interventions that improve conscientiousness as well as policies that specifically target less conscientious individuals (e.g., default choices for retirement savings).

Personality, Lifetime Earnings, and Retirement Wealth

Studies of adolescents and young adults have shown that schooling impacts economic outcomes beyond its impact on cognitive ability. Research has also shown that the personality trait of conscientiousness predicts health outcomes, academic outcomes, and divorce. Using the Big Five taxonomy of personality traits, this study examines whether non-cognitive traits are related to economic success over the life course. Examining Health and Retirement Study survey data linked to Social Security records on over 10,000 adults age 50 and over, we investigate the relationship of personality traits to economic outcomes. Controlling for cognitive ability and background variables, do more conscientious and emotionally stable adults have higher lifetime earnings, and is this due to higher annual earnings, longer work lives, or both? Do more conscientious adults save a higher proportion of their earnings for retirement, and does conscientiousness of each partner in a married couple matter? Do conscientiousness and emotional stability interact such that the effects of conscientiousness are greater among less emotionally stable adults?

Temperament in the Classroom

Variance in academic performance that persists when situational variables are held constant suggests that whether students fail or thrive depends not only on circumstance, but also on relatively stable individual differences in how children respond to circumstance. More academically talented children generally outperform their less able peers, but much less is known about how traits unrelated to general intelligence influence academic outcomes. This paper addresses several related questions: What insights can be gleaned from historical interest in the role of temperament in the classroom? What does recent empirical research say about the specific dimensions of temperament most important to successful academic performance? In particular, which aspects of temperament most strongly influence school readiness, academic achievement, and educational attainment? What factors mediate and moderate associations between temperament and academic outcomes? What progress has been made in deliberately cultivating aspects of temperament that matter most to success in school? And, finally, for researchers keenly interested in better understanding how and why temperament influences academic success, in which direction does future progress lie?

Personality Psychology and Economics

This paper explores the power of personality traits both as predictors and as causes of academic and economic success, health, and criminal activity. Measured personality is interpreted as a construct derived from an economic model of preferences, constraints, and information. Evidence is reviewed about the "situational specificity" of personality traits and preferences. An extreme version of the situationist view claims that there are no stable personality traits or preference parameters that persons carry across different situations. Those who hold this view claim that personality psychology has little relevance for economics. The biological and evolutionary origins of personality traits are explored. Personality measurement systems and relationships among the measures used by psychologists are examined. The predictive power of personality measures is compared with the predictive power of measures of cognition captured by IQ and achievement tests. For many outcomes, personality measures are just as predictive as cognitive measures, even after controlling for family background and cognition. Moreover, standard measures of cognition are heavily influenced by personality traits and incentives. Measured personality traits are positively correlated over the life cycle. However, they are not fixed and can be altered by experience and investment. Intervention studies, along with studies in biology and neuroscience, establish a causal basis for the observed effect of personality traits on economic and social outcomes. Personality traits are more malleable over the life cycle compared to cognition, which becomes highly rank stable around age 10. Interventions that change personality are promising avenues for addressing poverty and disadvantage.personality, behavioral economics, cognitive traits, wages, economic success, human development, person-situation debate

Personality and Response to the Financial Crisis

Social Security Administrationhttp://deepblue.lib.umich.edu/bitstream/2027.42/89939/1/wp260.pd

Temperament in the Classroom

Some students fare better than others, even when researchers control for family background, school curriculum, and teacher quality. Variance in academic performance that persists when situational variables are held constant suggests that whether students fail or thrive depends on not only circumstance but also relatively stable individual differences in how children respond to circumstance. More academically talented children, for instance, generally outperform their less able peers. Indeed, general intelligence, defined as the ability to understand complex ideas, to adapt effectively to the environment, to learn from experience, to engage in various forms of reasoning, to overcome obstacles by taking thought (Neisser et a!., 1996, p. 77), has a monotonic, positive relationship with academic performance, even at the extreme right-tail of the population (Gottfredson, 2004; Lubinski, 2009). Much less is known about how traits unrelated to general intelligence influence academic outcomes. This chapter addresses several related questions: What insights can be gleaned from historical interest in the role of temperament in the classroom? What does recent empirical research say about the specific dimensions of temperament most important to successful academic performance? In particular, which aspects of temperament most strongly influence school readiness, academic achievement, and educational attainment? What factors mediate and moderate associations between temperament and academic outcomes? What progress has been made in deliberately cultivating aspects of temperament that matter most to success in school? And, finally, for researchers keenly interested in better understanding how and why temperament influences academic success, in which direction does future progress lie

The Economics and Psychology of Personality Traits

This paper explores the interface between personality psychology andeconomics. We examine the predictive power of personality and the stability ofpersonality traits over the life cycle. We develop simple analytical frameworksfor interpreting the evidence in personality psychology and suggest promisingavenues for future research.education, training and the labour market;

Self-Regulation and School Success

Some children fare better academically than others, even when family background and school and teacher quality are controlled for (Rivkin, Hanushek, & Kain, 2005 ). Variance in performance that persists when situational variables are held constant suggests that individual differences play an important role in determining whether children thrive or fail in school. In this chapter, we review research on individual differences in self-regulation and their relation to school success

The Economics and Psychology of Personality Traits

This paper explores the interface between personality psychology and economics. We examine the predictive power of personality and the stability of personality traits over the life cycle. We develop simple analytical frameworks for interpreting the evidence in personality psychology and suggest promising avenues for future research.personality traits, lifecycle effects, psychology, economics

The Economics and Psychology of Personality Traits

This paper explores the interface between personality psychology and economics. We examine the predictive power of personality and the stability of personality traits over the life cycle. We develop simple analytical frameworks for interpreting the evidence in personality psychology and suggest promising avenues for future research.lifecycle effects, personality traits