Recent research my colleagues and I conducted explores this question, uncovering how personality influences pay and job prospects – and even helps explain part of the persistent gender wage gap.
Using data from Germany’s Socio-Economic Panel (an annual survey tracking around 22,000 households), we explored how personality traits known as the big five – openness, conscientiousness, extroversion, agreeableness and emotional stability – influence wages and career success.
Our findings were striking: personality differences between men and women contribute to pay disparities just as much as work experience does.
Here’s the twist: women generally score higher for traits like agreeableness, which is often associated with social harmony. Yet this trait can result in lower wages due to reduced bargaining power.
Conversely, emotional stability, a trait that predicts resilience and composure, is linked to higher earnings. But research shows that women report higher levels of neuroticism (effectively the opposite of emotional stability) than men.
Traits like agreeableness and emotional stability are not inherently good or bad, but their value in the workplace is often shaped by societal norms and organisational cultures.
To understand how personality traits shape pay, we developed a job search and bargaining model. This model simulated how people with different traits search for jobs, negotiate wages and stay employed.
We found that conscientiousness and emotional stability are power players in the job market. These traits positively influence wages and help reduce the time spent in unemployment for both men and women. Conscientious people are often perceived as reliable and hardworking, while emotional stability allows people to handle stress effectively – both of which employers value highly.
But agreeableness, despite its social benefits, turns out to be a financial liability. Highly agreeable people tend to avoid conflict, which can make them less assertive in negotiations. This trait disproportionately affects women, who score higher on agreeableness on average.
We also found that equalising personality traits between genders could reduce the wage gap by nearly 20%. This finding underscores how much personality differences – not just structural factors like experience – drive gender disparities in earnings.
What was our most striking insight? Personality traits don’t just affect wages through job performance or productivity, they also shape how people negotiate salaries. For instance, workers with higher levels of emotional stability may approach salary negotiations with more confidence, leading to better outcomes. On the other hand, agreeableness, often associated with accommodating others, could hinder assertive bargaining.
Women, who tend to display higher levels of agreeableness face a double penalty in the labour market. Not only are they perceived as less assertive negotiators, but the economic value of their agreeableness is often lower compared with men. Our study also found that lower emotional stability – linked to heightened stress or anxiety – reduces women’s bargaining power even more, amplifying the wage gap.
This dynamic reflects broader societal expectations and biases. Traits like assertiveness and competitiveness are often rewarded in professional settings, but they may be less accessible or desirable for people socialised differently. By penalising traits more commonly displayed by women, workplaces inadvertently reinforce gender-based inequities.
Consider a hypothetical example: two employees, one male and one female, apply for a managerial role. Both are equally qualified in terms of education and experience, but their personalities differ. The male candidate scores highly in emotional stability and low in agreeableness, traits associated with strong negotiation skills and assertiveness.
The female candidate scores higher in agreeableness and slightly lower in emotional stability. Despite their qualifications, the male candidate may be perceived as a better fit for the role due to implicit biases about what makes a “good leader”. As a result, the male candidate may receive a higher salary offer, even if his on-the-job performance ends up being equivalent.
This scenario, supported by our findings, underscores the importance of addressing biases in hiring and wage-setting practices.
Bridging the gap
What can be done to mitigate these disparities? Our study suggests the following strategies.
- Redefine workplace norms. Organisations can re-evaluate how they reward traits like agreeableness and emotional stability. For example, valuing collaborative and empathetic leadership styles alongside assertiveness could create a more inclusive framework.
- Provide negotiation training. Helping employees – particularly women – develop stronger negotiation skills could counteract some of the disadvantages linked to traits like agreeableness. Role-playing exercises and workshops can empower workers to advocate for themselves effectively.
- Address structural biases. Employers should be aware of how implicit biases shape decisions about hiring, promotions and pay. Conducting regular audits of pay practices and implementing standardised evaluation criteria can help ensure fairness.
Our findings point to a critical conclusion: personality matters. But it doesn’t have to perpetuate inequality. By addressing the biases around personality traits, we can move towards a more equitable labour market.
Recognising the role of personality traits in shaping wages offers a new lens for understanding the gender pay gap. It shifts the conversation from issues like education or work experience to more nuanced factors that influence how people navigate the job market.
Weilong Zhang, Associate Professor of Economics, University of Cambridge
This article is republished from The Conversation under a Creative Commons license. Read the original article.