Traditional Mincer-type hedonic wage equations typically fail to account for the effect of psychological capital, in part because such factors are often regarded as unobservable. This article incorporates a measure of psychological capital (specifically, self-esteem) that has been validated in the psychology literature into an otherwise typical hedonic wage model. Then, the sample is divided into race and gender subgroups and estimates are compared. The results suggest that self-esteem does play a role in determining wages for Whites (White men, in particular), but it has no detectable effect on the wages of African-Americans. Data are drawn from the 1979 National Longitudinal Study of Youth.
JEL: D (‘Microeconomics’), J (‘Labor and demographic economics’), J31 (‘Wage levels and structure, wage differentials’)
AverettS., & KorenmanS. (1996). The economic reality of the beauty myth. Journal of Human Recourses, 31(2), 304–330.
2.
BanduraA. (1986). Social foundations of thought and action: A social cogitative theory. Prentice Hall.
3.
BowlesS., GintisH., & OsborneM. (2001). Determinants of earnings: A behavioral approach. Journal of Economic Literature, 39(4), 1137–1176.
4.
BrocknerJ. (1988). Self-esteem at work. Lexington Books.
5.
CartonJ. S., & NowickiS. (1994). Antecedents of individual differences in locus of control reinforcement: A critical review. Genetic, Social, and General Psychology Monographs, 120(1), 31–81.
6.
CebiM. (2007). Locus of control and human capital investment revisited. The Journal of Human Resources, 42(4), 919–932.
7.
CoaseR. H. (1937). The nature of the firm. Economica, 4(16), 358–362.
8.
ColemanM., & DeLeireT. (2003). An economic model of locus of control and the human capital investment decision. The Journal of Human Resources, 38(3), 701–721.
9.
DemoD. H. (1985). The measurement of self-esteem refining our methods. Journal of Personality and Social Psychology, 48(6), 1490–1502.
10.
DreebenR. (1967). On what is learned in school. Addison-Wesley.
11.
DuncanG. J., & DunifonR. (1998). Long-run effects of motivation on labor-market success. Social Psychology Quarterly, 61(1), 33–48.
12.
FlemingJ. S., & CourtneyB. E. (1984). The dimensionality of self-esteem: A hierarchical facet model for revised measurement scales. Journal of Personality and Social Psychology, 46(2), 404–421.
13.
GleitmanH. (1991). Psychology (3rd ed.). Norton.
14.
GoldsmithA. H., VeumJ. R., & DarityW.Jr., (1997). The impact of psychological and human capital on wages. Economic Inquiry, 35(4), 815–829.
15.
HammermeshD., & BiddleJ. (1994). Beauty and the labor market. American Economic Review, 84(5), 1174–1194.
16.
HeckmanJ. (1979). Sample selection bias as a specification error. Econometrica, 47(1), 153–162.
17.
HeckmanJ., StixardJ., & UrzuaS. (2006). The effects of cognitive and noncognitive abilites on labor-market outcomes and social behavior. Journal of Labor Economics, 24(3), 411–482.
18.
HeineckG., & AngerS. (2010). The returns to cognitive abilities and rersonaility traits in germany. Labour Economics, 17(3), 535–546.
19.
LefcourtH. (1982). Locus of control: Current trends in theory and research (2nd ed.). Lawrence Erlbaum Associates.
20.
McGeeA., & McGeeP. (2016). Search, effort, and locus of control. Journal of Economic Behavior and Organization, 126(89), 89–101.
21.
OsborneM. (2000). The power of personality: Labor market rewards and the transmission of earnings. University of Massachusetts.
22.
ParsonsT. (1959). The school class as a social system. Harvard Educational Review, 29(4), 297–318.
23.
PiatekR., & PingerP. (2016). Maintaining (locus of) control? Data combination for the identification and inference of factor structure models. Journal of Applied Econometrics, 31(3), 734–755.
24.
RegisterC., & WilliamsD. (1990). Wage effects of obesity among young workers. Social Science Quarterly, 71(1), 130–141.
25.
RobinsonJ., & ShaverP. (1980). Measures of social psychological attitudes (6th ed.). The University of Michigan Institute for Social Research.
26.
RobinsonJ. P., ShaverR. P., & WrightsmanL. S. (1991). Measures of personality and social psychological attitudes (Volume 1). New York Academic Press.
27.
RosenbergM. (1965). Society and the adolescent self-image. Princeton University Press.
28.
RotterJ. B. (1966). Generalized expectancies for internal versus external control of reinforcement. Psychological Monographs: General and Applied, 80(1), 1–28.
29.
SargentJ., & BlanchflowerD. (1994). Obesity and stature in adolescence and earning in young adults. Archives of Pediatrics and Adolescent Medicine., 148(7), 681–687.
30.
SchumpeterJ. A. (1934). The theory of economic development. Oxford University Press.
31.
SobalJ. (1991). Obesity and socioeconomic status: A framework for examining relationships between physical and social variables. Medical Anthropology, 13(3), 231–247.
