Effect of Noncognitive Skills and Related Personality Traits to Productivity in Labor Market :

Abstract

In the last decade, researchers in labor economics and related areas have become more interested in personality traits as determinants of success in the labor market. Recently, psychologists and economists in the US and other Western countries have been carrying out several collaborative works focusing on this topic. This research may have a profound impact on labor economics, educational policies, and related areas. We conclude from this research that (i) evaluation of educational reforms based on changes in scores of cognitive skills might be insufficient, and (ii) educational policies should consider programs that improve noncognitive skills for children who live in an environment that is not conducive to skill development. The present article reviews recent research on the relationship between wage and “noncognitive skills,” a new concept put forward by a James J. Heckman a Nobel Prize laureate in Economics. This review focuses on personality traits as noncognitive skills. Although there are several indicators of success in the labor market, such as job satisfaction, in this article, we focus on wage as it is considered the most important indicator of worker productivity and an important outcome of education. I also show some results by using data from a relatively large sample survey conducted in Japan, and provide some discussions on the future direction of research on this topic.