The returns to personality traits across the wage distribution

Summary

This paper investigates variation in the wage effects of non-cognitive skills across the wage distribution. I expect (i) increasing explanatory power and (ii) increasing magnitudes of the effects of non-cognitive skills on wages across the wage distribution. I test these hypotheses using unconditional quantile regressions with data from Germany, the UK and Australia. To test the joint explanatory contribution of multiple variables within a quantile-regression framework, I propose a new statistic that quantifies the realtive rise in explanatory power generated by additional explanatory variables. The findings support both hypotheses and provide further evidence for the importance of non-cognitive skills in the labor market.