These 3 Personality Traits Affect What You Earn — but Only After Age 40 (2022)

We often hear about the power of personality in shaping our careers — how some traits are beneficial while others are more harmful. But it is less clear when personality traits matter most and who benefits most from them. A recent paper investigates this by looking at the connection between personality traits and lifetime earnings among men at different ages. It finds that men’s earnings are not affected by personality at all in the beginning of their careers, but that men who are more conscientious and extroverted, as well as less agreeable, reap large benefits between their 40s and 60s. The evidence also points to a subgroup of men who benefit from these traits more than twice as much as others: those with a graduate education.

We often hear about the power of personality, and how some traits are beneficial for our careers while others are more harmful. For example, we know that being more conscientious (hard-working, driven, reliable, and organized) is associated with better job performance, and that being nice (more agreeable) does not pay off in wages. But it is less clear when these personality traits matter most for our careers — are they more important earlier on, or in the middle? — and who benefits most from them.

In a recent paper, I investigate these questions by looking at the connection between personality traits and lifetime earnings among men at different ages. I find that men’s earnings are not affected by personality at all in the beginning of their careers, but that men who are more conscientious and extroverted, as well as less agreeable, reap large benefits between their 40s and 60s. The evidence also points to a subgroup of men who benefit from these traits more than twice as much as others: those with a graduate education. The overall effect of personality on lifetime earnings is large – in the same order of magnitude as the average lifetime earnings difference between high school and college graduates in my sample: over $1.2 million.

I used data from the Terman study, one of the longest running studies in psychology that examines the development of gifted individuals since 1922. It has followed over 1,000 men and women in California who were selected for having IQs of at least 140 (the top 0.5% of the population). It is probably the only study that has U.S. data on earnings throughout a lifetime, which allowed me to relate early measures of personality to annual earnings from age 18 to 75. I focused here on the results for men (595 total), because women’s professional opportunities in this cohort were so limited.

I constructed annual earnings measures from retrospective questions in questionnaires that were given every 5-10 years. Personality information came from participants’ parents and teachers, who rated children’s extraversion and openness to experience (a measure of curiosity and originality) when they were about 10 years old, as well as from participants themselves, who rated themselves on the traits of conscientiousness, agreeableness, and emotional stability at around age 30. There is also information on participants’ background from their parents, who described their education, employment, finances, as well as the child’s health growing up.

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The benefit of linking earnings later in life to personality measured at a young age is that it makes us more confident that the association between personality traits and earnings did not arise because someone who got a lucky draw with high income became more extroverted as a result. Instead, we can interpret the association as personality influencing earnings. This approach relies on the fact that while personality can change over time, personality relative to our peers is quite stable (i.e., being the most conscientious person among your peers remains robust over time).

When and where does personality matter?

To analyze how people’s lifetime earnings are influenced by their personality traits, I statistically compared men with equal IQ, parental characteristics, and childhood conditions (including finances and health), at each age. I attributed the remaining differences in earnings of otherwise equal men to differences in scores on personality traits.

I found that in early years, earnings were no different for men with strong personality traits. At around age 30, a gap emerged, as men who were more conscientious, extroverted, and less agreeable started earning more. These gains from conscientiousness and extraversion (between $10-20,000 annually) fully unfolded in the prime working years, between the ages of 40 and 60.

Researchers have not seen this kind of hump-shaped pattern yet, because most do not separate different age groups. But if we look at data of very young workers, we could erroneously conclude that personality traits do not matter for earnings. Instead, the results here indicate that the main advantages from strong personality traits arise to advanced-level workers. You can imagine why – for example, consider how a manager’s personality would have a stronger impact on the productivity of his team than that of an entry-level employee. The large late-life effects also demonstrate that the intensity and length of one’s working life –both of which tend to be influenced by personality—influence earnings.

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How does this difference in annual earnings add up over a lifetime? Consider two men in the Terman study, who are equal on all background characteristics and all traits, except for extraversion. The man who is average on this trait will earn $600,000 more over a lifetime than his more introverted peer (whose extraversion is, say, in the bottom 20% of the distribution). This effect size corresponds to about 15% of lifetime earnings. The magnitude of this effect is equally large for conscientiousness, which isn’t surprising given other research: conscientious men receive higher wages for being more productive on the job. They are also more likely to obtain higher education, which in turn boosts earnings. Furthermore, individuals that are more conscientious tend to lead longer and healthier working lives, and therefore accumulate higher lifetime earnings.

I also found that more agreeable men, who tend to be friendly and helpful to others, have significantly lower earnings than less agreeable men. The man who is very agreeable (in the top 20%) will earn about $270,000 less over a lifetime than the average man.

IQ is also significantly positively associated with lifetime earnings in this sample, even though one can only compare very-high-IQ individuals to even-higher-IQ individuals in Terman. A 10-point increase in IQ is associated with about $200,000 higher lifetime earnings. Interestingly, emotional stability and openness to experience were not significantly related to lifetime earnings in this sample.

Who benefits most?

Next, I compare men with the same background and traits at the same education level to see whether the influence of traits depends on education. It turns out that highly educated men benefit more than twice as much from these three personality traits (conscientiousness, extraversion, and low agreeableness) than less educated men. For example, when comparing two men with a bachelor’s degree, the introvert (bottom 20% of extraversion) will earn about $290,000 less than his peer with average extraversion. This earnings difference increases to about $760,000 when we compare an introvert to someone at the average extraversion when both hold a Master’s or doctorate.

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In economics, we would attribute this to complementarities in production: two types of capital (soft-skill-human capital and education) are worth more together than the sum of their parts. It also means that someone very extroverted or conscientious stands a lot more to gain from higher education than someone who does not have these strong skills.

Of course the high-IQ individuals of the Terman sample are unique. So how much do these findings apply to the majority of us today? This depends on whether careers develop in a similar way now as they did back then. We have reason to believe that the basic mechanisms that determine which skills drive earnings – such as productivity, promotions, and health behaviors – are still quite similar. And they seem to be. In fact, the personality traits that have the strongest association with lifetime earnings in Terman are exactly the same traits that are found to be most important for wages among today’s workers.

This research gives us a good summary of the possible channels through which personality traits can influence our careers. Conscientiousness and extraversion not only affect on-the-job productivity directly, but they can also increase lifetime earnings indirectly by affecting behavior and the length and intensity of our working lives. Age-by-age analyses over the lifetime show that even if earnings differences between young workers are small today, we should expect them to grow significantly as they advance in their careers.

FAQs

What are the 3 personality traits? ›

There are three criteria that are characterize personality traits: (1) consistency, (2) stability, and (3) individual differences. To have a personality trait, individuals must be somewhat consistent across situations in their behaviors related to the trait.

Which personality traits tend to become stronger between the ages of 20 and 40? ›

In fact, personality does change over long periods of time. For example, we tend to become more socially dominant, more conscientious (organized and dependable), and more emotionally stable between the ages of 20 and 40, whereas openness to new experiences tends to decline as we age.

Which personality traits change the most with age? ›

Psychologists call it "the maturity principle." People become more extraverted, emotionally stable, agreeable and conscientious as they grow older. Over the long haul, these changes are often pronounced. Some individuals might change less than others, but in general, the maturity principle applies to everyone.

What are the 4 types of personalities? ›

A study published in Nature Human Behaviour reveals that there are four personality types — average, reserved, role-model and self-centered — and these findings might change the thinking about personality in general.

What are personality types? ›

Each person is a unique combination of four personality types. Over the centuries, these basic categories have gone by several names and designations, but for our purposes, they are known as the director, the socializer, the thinker, and the supporter.

Does agreeableness increase with age? ›

Agreeableness demonstrated a fairly linear increase with age whereas the pattern for Conscientiousness was curvilinear: scores increased up to a peak somewhere between the ages of 50 to 70 and then declined. Average levels of Neuroticism generally declined with age but increased slightly starting around age 80.

Which of the Big 5 personality traits tends to increase all the way through late adulthood? ›

-the transition into late adulthood was characterized by increases in the following aspects of conscientiousness: impulse control, reliability, and conventionality.

Does personality affect income? ›

Personality and the gender pay gap

In fact, women with high-earning personality types still earn less than men who do not possess those traits. For example, extroverted women earn about $55,000 annually, while introverted men earn an average of over $64,000.

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