Does Your Personality Impact Your Paycheck?

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Do you ever wonder why some people make more money than you do? What exactly determines how much money we will make in our lifetime? Is it our educational level, our connections, pure chance—or is it our personality?

Can we even measure personality to predict how much money we will make? With this goal in mind, a research team from Tilburg University in the Netherlands looked at data collected from almost 8,500 people in Germany and analyzed their jobs, income and psychological profiles. Sixty-eight percent were male, 32 percent were female and the mean age of the group was about 44 years old.

The participants were asked a series of questions related to their personality traits that were best suited to a particular job: agreeableness, conscientiousness, extroversion, neuroticism and openness. The team found that employees who were more agreeable, more conscientious or more open to experiences than their jobs needed them to be got paid less than the people whose traits were more in line with the job requirements!

The lead researcher explained that personality characteristics that have long been thought of as universally adaptive were not very beneficial or were even detrimental, given particular job characteristics. Individuals should take note because the findings suggest that if employees manage to find jobs that fit their personalities, they can earn more money.

In other words, when looking for a job that’s a good fit, it’s important to think beyond your ability to fulfill the job requirements, but make sure you also have the temperament and personality to flourish in the job. If you don’t consider this, then absolutely, your paycheck could suffer.

Another study by Miriam Gensowski, University of Copenhagen, reviewed data from all schools in California, grades 1 through 8, from 1921-22. They focused on the top one-half percent of the IQ distribution, 856 men and 672 women born around 1910. The data followed how well these students did through 1991.

They are rated on the same personality traits: openness to experience, conscientiousness, extraversion, agreeableness and neuroticism. In pure dollars, it is remarkable how much the trait of conscientiousness mattered! Men who measured as only one standard deviation higher on this trait earned a whopping average of $567,000 more over their lifetimes.

In addition, measuring as extroverted by only one standard deviation higher was worth almost as much, $490,100. Both returns tended to rise for the most highly educated of the men. For women, the significance was smaller, possibly due to restricted opportunities and unfair pay. An extroverted woman had higher earnings than men had for conscientiousness.

The more agreeable men earned significantly less with just one standard deviation higher on agreeableness, reducing lifetime earnings by about $267,600. This is the man in your office who’s normally less antagonistic and more likely to consider others’ interests before his own.

But a word of caution. This data is confirmed only for high-IQ California individuals for the time span up to 1991. It could not hold true in every circumstance. However, higher IQ did correlate with higher earnings, even within this group of higher IQs. Apparently, being “really smart” means you will earn more money.

Generally, these personality traits correlated more strongly with income when the students/workers were in their early 30s. Their influence peaked between the ages of 40 and 60, and decreased thereafter.

As far as higher education, it was determined that individuals who received more education ended up with greater conscientiousness. So, higher education yields some pretty high financial returns, more than 12 percent a year for a college degree. A doctorate was worth about 1.5 times that. Keep in mind this is suggestive only and restricted to a certain set of individuals in the 20th century. And just in case you were wondering, there was not a particular earnings return for being the class valedictorian!

A more interesting result from the data was that IQ and conscientiousness were not very well correlated, which means that finding the best workers is not so easy. The characteristic of openness, though, is correlated with IQ, so it stands to reason that the smarter workers are more prone to experiment and try out new ventures. But recall that conscientiousness and extroversion resulted in the biggest earnings, $567,000 and $490,100 respectively. And these returns rose the most for the most highly educated of the men.

These are very good studies, but we still don’t know enough of how our personalities affect our careers and our general earning capacity. Still, it bodes well for all of us to continue self-improvement and to strive to understand our strengths and weaknesses. The famed Myers-Briggs Personality Test is a good place to start. You can find it online. ■

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