Occupational outcomes : the influence of personality and human capital

Abstract

This thesis econometrically investigates whether various sources of individual heterogeneity influence the distribution of individuals into different occupations in the labour market. Roles in the labour market often require different tasks to be performed by individuals. Individuals are a heterogeneous commodity and vary in their characteristics which can influence how productive they are in various jobs and how disagreeable they find particular varieties of labour. Due to the vast number of roles available in the labour market, roles are often grouped together. From both the perspective of firms and individuals, jobs within these groups are relatively closer than others; and these are referred to as occupations. The examination of occupations is argued to allow for the examination of heterogeneous individuals without depending on changes in wages to reflect these differences. It is argued that by directly modelling the occupational outcomes of individuals, heterogeneity in the labour market can be better reflected. This thesis examines the effects of human capital, including credentialism effects in education, in addition to parental status capturing dynasty hysteresis and psychometrically derived personality traits based on the five factor model and their effect on occupational outcomes. This thesis uses discrete choice modelling to examine a previously unexamined nationally representative dataset for the developed economy of Australia, the Household Income and Labour Dynamics in Australia (HILDA) survey, and how its individuals are distributed amongst the heterogeneous occupations. This thesis specifically undertakes a number of different analyses. These analyses consist of the examining of the dichotomy of blue collar and white collar occupations and whether they are empirically meaningful, determining the effect of factors, including hedonic characteristics, over broad multinominal categories of occupations and the optimal level of aggregation of these factors, and a random parameter logit model which allows for the various sources of heterogeneity to have different effects across individuals. This thesis concludes that while finer levels of analysis in occupations are desirable and meaningful, they are not econometrically feasible; that the effects of various forms of heterogeneity are very different between individuals and that in addition to human capital, parental status and personality factors have a significant effect on occupational outcomes, with the latter potentially rivalling human capital.

Date of Award	2012
Original language	English