Personality Traits, Intra-household Allocation and the Gender Wage Gap

By: Christopher Flinn (New York University) ; Petra Todd (University of Pennsylvania) ; Weilong Zhang (University of Pennsylvania)
A model of how personality traits affect household time and resource allocation decisions and wages is developed and estimated. In the model, households choose between two modes of behavior: cooperative or noncooperative. Spouses receive wage offers and allocate time to supplying labor market hours and to producing a public good. Personality traits, measured by the so-called Big Five traits, can affect household bargaining weights and wage offers. Model parameters are estimated by Simulated Method of Moments using the Household Income and Labor Dynamics in Australia (HILDA) data. Personality traits are found to be important determinants of household bargaining weights and of wage offers and to have substantial implications for understanding the sources of gender wage disparities.
Keywords: gender wage differentials, personality and economics outcomes, household bargaining, Time Allocation
JEL: D10 J12 J16 J22 J31 J71

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