Personality traits, intra-household allocation and the gender wage gap

doi:10.1016/j.euroecorev.2017.11.003

European Economic Review

Available online 2 December 2017

In Press, Corrected Proof

Personality traits, intra-household allocation and the gender wage gap☆

https://doi.org/10.1016/j.euroecorev.2017.11.003 Get rights and content

Abstract

A model of how personality traits affect household time and resource allocation decisions and wages is developed and estimated. In the model, households choose between two behavioral modes: cooperative or noncooperative. Spouses receive wage offers and allocate time to supplying labor market hours and to producing a public good. Personality traits, measured by the so-called Big Five traits, can affect household bargaining weights and wage offers. Model parameters are estimated by Simulated Method of Moments using the Household Income and Labor Dynamics in Australia (HILDA) data. Personality traits are found to be important determinants of household bargaining weights and of wage offers and to have substantial implications for understanding the sources of gender wage disparities.

Keywords

Gender wage differentials

Personality and economic outcomes

Household bargaining

Time allocations

JEL classification

J12

J16

J22

J31

J71

^☆: We are grateful for useful comments from seminar participants at University of Pennsylvania, Collegio Carlo Alberto, Tennessee, Notre Dame, the first annual SEHO meetings, The 2017 North American Summer Meeting and Asian Meeting of the Econometric Society, and the 92nd WEAI Annual Conference as well as from two anonymous referees.

¹: Todd and Zhang acknowledge research funding from the Pension Research Council/Boettner Center for Pensions and Retirement Research at the Wharton School and the Population Studies Center of the University of Pennsylvania. Opinions and views are solely the responsibility of the authors. Weilong Zhang is a Ph.D. student in the U Penn economics department.