Séminaire

A Dynamic Model of Personality, Schooling, and Occupational Choice

Econometrics and Empirical Economics/Development, Labor and Public Policy joint seminar

Petra Todd (University of Pennsylvania)

2 octobre 2018, 15h30–17h00

Salle MS 001

Econometrics and Empirical Economics Seminar

Résumé

This paper develops a dynamic model of schooling and occupational choices that incorporates personality traits, as measured by the so-called “big five" traits. The model is estimated using the longitudinal HILDA dataset from Australia. Personality traits are found to play a critical role in explaining education and occupation choices over the lifecycle. The traits evolve during young adult years but stabilize in the mid-30s. 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. The estimated model is used to evaluate two education policies: compulsory senior secondary school and a 50% college subsidy. Both policies are found to be effective in increasing educational attainment, but the compulsory schooling policy provides greater benefits to lower socioeconomic groups. Allowing personality traits to evolve with age and with years of schooling proves to be important in capturing heterogeneity in how people respond to educational policies.

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