Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/156249
Authors: 
Heywood, John S.
Jirjahn, Uwe
Struewing, Cornelia
Year of Publication: 
2016
Series/Report no.: 
Research Papers in Economics 3/16
Abstract: 
This work contributes to the literature demonstrating an important role for psychological traits in labor market decisions. We show that West German workers with an internal locus of control sort into jobs with performance appraisals. Appraisals provide workers who believe they control their environment a tool to demonstrate their value and achieve their goals. We confirm that workers who are risk tolerant also sort into jobs with performance appraisals but explain why the influence of the locus of control and risk tolerance should not be additive. We demonstrate this by estimating a routinely large and significantly negative interaction in our sorting equations. We also show that important patterns of sorting are revealed only when taking into account the interaction of locus of control and risk tolerance.
Subjects: 
locus of control
risk attitude
performance appraisal
performance pay
sorting
extrinsic rewards
intrinsic motivation
JEL: 
D03
J33
M52
Document Type: 
Working Paper

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