Essays on Education, Personality and the Labor Market

How do different dimensions of personality predict school vs. labor-market performance? How has the value of these traits changed over time? In Essay I, we (my co-author and I) answer these questions using data that includes multidimensional personality and cognitive test scores from mandatory military conscription for 80% of Finnish men. We document that some dimensions of noncognitive skills are productive at school, and some dimensions are counterproductive at school but still valued in the labor market. Action-oriented traits predict low school performance but high labor market performance. School-oriented traits, such as dutifulness, deliberation, and achievement striving, predict high school performance but are not independently valued in the labor market after controlling for school achievement. We further document that the labor-market premium to action-oriented personality traits has rapidly increased over the past two decades. Labor markets are in constant change. Which personality traits and skills help workers to deal with a changing environment? In Essay II, we document how responses to labor-market shocks vary by individuals' psychological traits. We construct measures of cognitive ability, extraversion, and conscientiousness using the same military data as in Essay I. We analyze establishment closures and mass layoffs between 1995-2010 and document heterogeneous responses to the shock. Extraversion is the strongest predictor of adaptation: the negative effect of a mass layoff on earnings is about 20% smaller for those with one standard deviation higher scores of extraversion. Conscientiousness appears to have no differential impact conditional on other traits. Cognitive ability and education predict a significantly smaller initial drop in earnings, but have no long term advantage. Our findings appear to be driven directly by smaller dis-employment effects: extraverted and high cognitive-ability individuals find re-employment faster in a similar occupation and industry they worked in before. Finland's success in international student comparisons is often attributed to the quality of its teachers. In Essay III, I examine the teacher selection process in Finland and highlight three new findings. First I show that teacher graduates have lower standardized test performance in comparison to other university graduates. However, in contrast to findings from other developed countries, they have been closing that gap during the last 40 years. Second, past test performance is a poor predictor of teacher aptitude, as measured by expert evaluators during entrance interviews for teacher training programs. This implies that the performance gap between teaching and other programs is not due to lack in applicant quality, but due to uncorrelated factors that influence the aptitude test performance in teaching. In other words, teacher training programs in Finland are not looking to enroll the academically best students. Third, relative to other university graduates, teachers have high wages but low earnings, which helps to explain the popularity of teacher training programs.