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Self-Esteem and Earnings
Open accessAbstract
Recent research in economics suggests a positive association between self-esteem and earnings. A major problem in this literature is that from simple cross-sectional wage regressions it is not possible to conclude that self-esteem has a causal impact on earnings. While classical measurement error leads to an attenuation bias, reverse causality and omitted variable are likely to drive the OLS coefficient on self-esteem upward. Using the National Longitudinal Survey of Youth (NLSY) that administered the Rosenberg Self-Esteem Scale during the 1980 and 1987 interviews, I provide further evidence for the existence of a self-esteem premium by exploiting variation in these measures in the two years. I show that the estimated impact of self-esteem in 1987 on earnings is about two times greater than previous OLS estimates would imply. The main explanation for this result is the large extent of measurement error in the reported self-esteem measure.
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Locus of control and self-esteem, two facets of Emotional Stability, predict wages.
“locus of control and self-esteem, two facets of Emotional Stability, predict wages (Judge and Hurst [2007]; Drago [2008]; Duncan and Dunifon [1998]).”
From Personality Psychology and Economics (2011) · cites this paper as Drago [2008]
The Introduction and section 3 report that self-esteem predicts earnings in Drago’s wage analysis. The passage labeled Conclusion also reports a finding from Goldsmith et al. (1997) linking locus of control to wages, but our copy does not identify either trait as a facet of Emotional Stability. (LLM, conf=0.88)
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Research works printed but not linked: 14
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Personality Psychology and Economics
Almlund, M., Duckworth, A. L., Heckman, J., & Kautz, T. (2011) · National Bureau of Economic Research · doi:10.3386/w16822 · Cited by 540
Metadata
- Authors
- Drago, F.
- Affiliations
- University of Messina (IT)
- Corresponding author
- Drago, Francesco
- ORCID
- Drago, Francesco
- Venue
- Journal of Economic Psychology
- Publisher
- Elsevier BV
- Published
- 2008
- Volume
- 32
- Issue
- 3
- Pages
- 480-488
- ISSN
- 0167-4870 (ISSN-L)
- OpenAlex
- W2065667983
- Cited by
- 109
- References
- 0
- Citations by year
- 2026: 3 · 2025: 7 · 2024: 2 · 2023: 5 · 2022: 3 · 2021: 5 · 2020: 9 · 2019: 9 · 2018: 10 · 2017: 6 · 2016: 13 · 2015: 17 · 2014: 5 · 2013: 8 · 2012: 3
- FWCI
- 13.46
- Type
- journal article
- Language
- en
- Open access
- green
- doi.org
- Locations
- Journal of Economic Psychology (publishedVersion)
- SSRN Electronic Journal (acceptedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- Econstor (Econstor) (submittedVersion)
- Funders
- Rheinische Friedrich-Wilhelms-Universität Bonn
- Topics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Labor market dynamics and wage inequality
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Experimental Behavioral Economics Studies
- Social Sciences › Economics, Econometrics and Finance › Finance › Financial Literacy, Pension, Retirement Analysis
- Keywords
- self-esteem, earnings, wage premium, measurement error, reverse causality, omitted variable bias, attenuation bias, Rosenberg Self-Esteem Scale, National Longitudinal Survey of Youth
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