Effects of behavioural and psychological attributes on labour market outcomes in an uncertain economic environment

Matsuro, Leon (2020-03)

Thesis (PhD)--Stellenbosch University, 2020.

Thesis

ENGLISH ABSTRACT : The power of human capital variables in predicting an individual’s economic success is well documented theoretically and empirically. However, recently, economists have acknowledged that even with a rich set of controls, residual differences remain unexplained by traditional economic variables. A more recent effort incorporates insights from neighbouring social sciences, including personality psychology, in examining an individual’s life outcomes. At the center of this research has been the role of unobservable individual heterogeneity, in particular behavioural and psychological attributes. There is, however, a substantial imbalance in the geographical distribution of this research; the evidence is mostly limited to developed countries, which differ systematically from developing countries. This dissertation aims to address this imbalance. It examines the role of behavioural and psychological attributes in explaining an individual’s labour market outcomes in an emerging economy characterized by uncertainty. The dissertation introduces a novel Zimbabwean matched employer-employee data set that captures key variables of workers’ behavioural and psychological attributes. It derives measures of workers’ Big Five personality traits, risk and time preferences, and examines their role in explaining labour markets outcomes in the Zimbabwean manufacturing sector. Chapter 2 employs a factor analytical strategy to extract five personality factors from a 15-item Big Five Inventory. The factors - Openness, Conscientiousness, Extraversion, Agreeableness and Neuroticism, commonly known as the Big Five - represent the broad dimensions of abstracting an individual’s personality. The factor model passes fitness tests, and the extracted factors retain acceptable levels of internal reliability. In addition, the factors mirror the universal distribution of the Big Five personality traits by age and gender. Chapter 3 examines the role of the Big Five personality traits in explaining labour market outcomes in the Zimbabwean manufacturing sector. To do this, the study controls for the Big Five personality traits in models that estimate sectoral selection, earnings, and job mobility. The empirical findings show that personality traits explain the three labour market outcomes over and above the traditional economic variables. Chapter 4 uses experimental data to construct a risk aversion measure and examines its role in explaining job mobility. The study confirms the empirical findings that risk tolerant individuals are more likely to experience job mobility, as compared to their risk averse peers. This result is robust to a set of controls, including industrial sector fixed effects. Chapter 5 computes measures of worker’s time preferences (exponential and hyperbolic discount rates) and examine their role in explaining outstanding salaries. The empirical results suggest that individual and job characteristics - rather than time preferences - explain outstanding salaries. Chapter 6 simultaneously controls for personality traits, risk, and time preferences in labour market outcome models. The study finds empirical support for the simultaneous inclusion of behavioural and psychological attributes in labour market models. Overall, the analysis shows that behavioural and psychological attributes constitute important individual characteristics that are central to the analysis of labour markets.

AFRIKAANSE OPSOMMING : Die belangrikheid van opvoeding en die bou van individuele kapitaal om iemand se ekonomiese sukses te voorspel is goed gedokumenteer teoreties en empiries. Alhoewel, ekonome het onlangs erken dat selfs met ‘n stel kontrole veranderlikes, dat daar steeds verskille in ekonomiese sukses oorbly wat nie verduidelik kan word deur die onafhanklike en kontrole veranderlikes nie. Deesdae, word insig getrek uit sosiale wetenskappe onder andere persoonlikheid sielkunde wanneer ekonomiese lewensuitkomstes bestudeer word. Hierdie navorsing fokus gewoonlik op verskille tussen mense wat nie ooglopend is nie, spesifiek gedrags en sielkundige verskille. Ongelukkig, kom die meerderheid van hierdie navorsing uit ontwikkelde lande, wat verskil van ontwikkelende lande. Hierdie tesis mik om hierdie balans reg te stel. Dit bestudeer die rol van gedrags en sielkundige faktore in die verduidelik van ‘n mens se arbeidsmark uitkomstes in ‘n ontwikkelende land waar onsekerheid hoog is. Hierdie tesis stel voor ‘n nuwe datastel waarin werkers in Zimbabwe gepaar word met hul werkgewers en wat belangrike veranderlikes van werkers se gedrags en sielkundige aspekte in het. Dit bevat maatstawwe van werkers se groot 5 persoonlikheidstrekke, risiko en tyd voorkeure en bestudeer hierdie faktore se rol in die verduidelik van individuele arbeidsmark uitkomstes in Zimbabwe se vervaardigings sector. Hoofstuk 2 maak gebruik van ‘n faktor analise strategie om 5 persoonlikheids trekke uit ‘n vyftien faktor groot vyf biblioteek te trek. Die vyf faktore is openlikheid, pligsgetrouheid, Ekstroversie, aangenaamheid en neurotisme. Algemeen bekend as die Groot Vyf - verteenwoordig die breë dimensies van die abstrahering van 'n individu se persoonlikheid. Die faktormodel slaag fiksheidstoetse, en die onttrekde faktore behou aanvaarbare vlakke van interne betroubaarheid. Daarbenewens weerspieël die faktore die universele verspreiding van die groot vyf persoonlikheidseienskappe volgens ouderdom en geslag Hoofstuk 3 ondersoek die rol van die Groot Vyf persoonlikheidseienskappe in die verduideliking van arbeidsmarkuitkomste in die Zimbabwiese vervaardigingsektor. Om dit te doen, kontroleer die studie vir die Groot Vyf persoonlikheidseienskappe in modelle wat sektorale seleksie, verdienste en werksmobiliteit skat. Die empiriese bevindinge toon dat persoonlikheidseienskappe die drie arbeidsmarkuitkomste bo en behalwe die tradisionele ekonomiese veranderlikes verduidelik. Hoofstuk 4 gebruik eksperimentele data om 'n risiko-aversiemaatstaf te konstrueer en ondersoek die rol daarvan in die verduideliking van werkmobiliteit. Die studie bevestig die empiriese bevindinge dat risiko-verdraagsame individue meer geneig is om werkmobiliteit te ervaar, in vergelyking met hul risiko-sku eweknieë. Hierdie resultaat bly constant selfs wanneer gekontrolleer word vir 'n stel beheermaatreëls, insluitend industriële sektor vaste effekte. Hoofstuk 5 bereken maatstawwe van werker se tydvoorkeure (eksponensiële en hiperboliese verdiskonteringskoerse) en ondersoek hul rol in die verduideliking van uitstaande salarisse. Die empiriese resultate dui daarop dat individuele en werkseienskappe - eerder as tydsvoorkeure - uitstaande salarisse verklaar. Hoofstuk 6 kontroleer gelyktydig vir persoonlikheidseienskappe, risiko en tydvoorkeure in arbeidsmarkuitkomsmodelle. Die studie vind empiriese ondersteuning vir die gelyktydige insluiting van gedrags- en psigologiese eienskappe in arbeidsmarkmodelle. Oor die algemeen toon die ontleding dat gedrags- en psigologiese eienskappe belangrike individuele kenmerke uitmaak wat sentraal staan in die ontleding van arbeidsmarkte.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/108107
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