Locus of Control and Low-Wage Mobility

Daniel Schnitzlein and Jens Stephani

No 589, SOEPpapers on Multidisciplinary Panel Data Research from DIW Berlin, The German Socio-Economic Panel (SOEP)

Abstract: We investigate whether non-cognitive skills - in particular Locus of Control - are important determinants of the labour market processes at the low-wage margin. Based on data from the German Socio-Economic Panel, we estimate dynamic multinomial logit models with random effects and investigate whether Locus of Control influences the probability of being higher-paid or low-paid as well as the probability of escaping low wages by moving up to higher-paid employment. Our results reveal a significant amount of state dependence in low pay even after controlling for Locus of Control and other non-cognitive skills. Furthermore, compared to individuals with an external Locus of Control, individuals with a more internal Locus of Control have a significantly higher probability of being higher-paid instead of low-paid. Conditional on being low-paid, individuals with an internal Locus of Control additionally have a significantly higher probability of moving to higher-paid employment in the following year than individuals with an external Locus of Control.

Keywords: low-wage; wage mobility; personality; non-cognitive skills; inequality; SOEP (search for similar items in EconPapers)
JEL-codes: J30 J60 (search for similar items in EconPapers)
Pages: 29 p.
Date: 2013
New Economics Papers: this item is included in nep-lab, nep-lma and nep-neu
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Related works:
Journal Article: Locus of Control and low-wage mobility (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:diw:diwsop:diw_sp589

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