Noncognitive Determinants of Economic Outcomes and Behaviors: An Empirical and Experimental Analysis.

Abstract

An individual's decision making and life outcomes are often affected by noncognitive factors such as social skills and personality traits. A small but growing literature investigates the impact of noncognitive factors and skills on economic behavior. Over the course of three essays I utilize both econometric and experimental techniques to investigate how social skills and personality traits affect economic outcomes and decision making. The first chapter is a purely empirical study of social skills and labor market outcomes that utilizes techniques derived from the field of labor economics. The final two chapters utilize experimental methodologies developed in the fields of behavioral and experimental economics to study the link between personality and behavior in several economic games.

The first chapter investigates the impact of social networking skills on future economic outcomes. I utilize detailed social networking and labor market data drawn from the National Longitudinal Study of Adolescent Health. By controlling for a number of compounding factors and avoiding endogeneity by using past social skill proxies in empirical models of wages and education, I find that social networking skills have a significant impact on labor market outcomes. The second and third chapters utilize experimental data from a sample of one hundred twenty undergraduates from Middle Tennessee State University. The students participate in a number of economic games and complete a large battery of personality assessments. The second chapter investigates the impact of personality on risk taking behavior in the presence of responsibility by analyzing subject behavior in a variation of the stag hunt game. I find minimal support for the hypothesis that personality heterogeneity explains differences in risk taking behavior when individuals are responsible for another's outcomes. However, I do find evidence that independent measures of risk preferences, measured using a Holt-Laury risk lottery, significantly predict a portion of observed behavior. The third chapter investigates the role personality plays in altruism and reciprocity by analyzing subject behavior in the dictator and ultimatum games. Apart from confirming previous findings, the results indicate that a number of previously unstudied personality traits play an important role in determining both altruistic behavior and negative reciprocity.