Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/83989
Authors: 
Schnitzlein, Daniel D.
Stephani, Jens
Year of Publication: 
2013
Series/Report no.: 
SOEPpapers on Multidisciplinary Panel Data Research 589
Abstract: 
We investigate whether non-cognitive skills - in particular Locus of Control - are important determinants of the labour market processes at the low-wage margin. Based on data from the German Socio-Economic Panel, we estimate dynamic multinomial logit models with random effects and investigate whether Locus of Control influences the probability of being higher-paid or low-paid as well as the probability of escaping low wages by moving up to higher-paid employment. Our results reveal a significant amount of state dependence in low pay even after controlling for Locus of Control and other non-cognitive skills. Furthermore, compared to individuals with an external Locus of Control, individuals with a more internal Locus of Control have a significantly higher probability of being higher-paid instead of low-paid. Conditional on being low-paid, individuals with an internal Locus of Control additionally have a significantly higher probability of moving to higher-paid employment in the following year than individuals with an external Locus of Control.
Subjects: 
low-wage
wage mobility
personality
non-cognitive skills
inequality
SOEP
JEL: 
J30
J60
Document Type: 
Working Paper

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