Effect of the Big Five Personality Traits on Entrepreneurial Probability: Influence of China’s Household Registration System

Abstract

Entrepreneurship can promote economic growth and reduce unemployment. However, the extent to which personality traits influence entrepreneurial probability in China is unclear. To bridge this gap in the literature, this study uses China Family Panel Studies data to examine the relationship between personality traits and entrepreneurial probability for three types of employment status: self-employment, farming, and non-agricultural employment. The results show that personality traits affect entrepreneurial probability and this effect differs by household registration and city size. Specifically, we find that personality traits have no significant effects on entrepreneurial probability in either the urban or rural hukou subsamples for those in non-agricultural employment, whereas conscientiousness and agreeableness are significantly positively related to entrepreneurial probability in the rural subsample for those in farming. We also show that individuals with a higher level of conscientiousness and openness in large cities are more likely to be self-employed than in non-agricultural employment, while the rural subsample remains unaffected by personality traits. Meanwhile, among the rural subsample, those with a higher level of agreeableness are more likely to enter self-employment in small cities than farming.