Why Your Personality Can Affect Your Salary and How It Shapes the Gender Wage Gap

When we think about what affects salaries, we often focus on education, work experience, or even pure luck. But what about personality traits? Are they just part of who we are, or do they play a larger role in determining our success in the job market?

Recent research that my colleagues and I have conducted explores this question, revealing how personality influences salary and job prospects – and even helps explain some of the persistent gender pay gap.

Using data from the German Socio-Economic Panel (an annual survey of approximately 22,000 households), we explored how personality traits known as the Big Five (openness, conscientiousness, extroversion, agreeableness, and emotional stability) ) influence salaries and professional success.

Our findings are striking: personality differences between men and women contribute to pay disparities just as much as work experience.

Here’s the thing: Women generally score better in traits like agreeableness, which is often associated with social harmony. Yet this characteristic can lead to lower wages due to reduced bargaining power. Conversely, emotional stability, a trait that predicts resilience and composure, is linked to higher income but tends to be lower among women than men.

To understand how personality traits influence compensation, we developed a job search and negotiation model. This model simulates how people with different characteristics search for jobs, negotiate salaries, and keep their jobs.

We found that conscientiousness and emotional stability are powerful players in the job market. These characteristics positively influence wages and help reduce the duration of unemployment for both men and women. Conscientious people are often seen as reliable and hardworking, while emotional stability allows people to manage stress effectively, two aspects that employers highly value.

But accreditation, despite its social advantages, turns out to be a financial handicap. Highly agreeable people tend to avoid conflict, which can make them less assertive in negotiations. This trait disproportionately affects women, who on average score higher in agreeableness.

We also found that equalizing personality traits between the sexes could reduce the pay gap by almost 20%. This finding highlights how personality differences – not just structural factors like experience – drive gender disparities in earnings.

What was our most memorable idea? Personality traits not only affect salaries in terms of job performance or productivity, they also shape how people negotiate salaries. For example, workers with higher levels of emotional stability may approach salary negotiations with more confidence, leading to better outcomes. On the other hand, agreeableness, often associated with accommodating others, could hinder assertive negotiation.

Women, who tend to demonstrate higher levels of agreeableness, face a double penalty in the labor market. Not only are they perceived as less assertive negotiators, but the economic value of their agreement is often lower than that of men. Our study also found that lower emotional stability, linked to increased stress or anxiety, further reduces women’s bargaining power, thereby widening the pay gap.

This dynamic reflects broader societal expectations and biases. Traits such as assertiveness and competitiveness are often rewarded in professional settings, but they may be less accessible or desirable for people who have been socialized differently. By penalizing traits more commonly exhibited by women, workplaces inadvertently reinforce gender-based inequalities.

Let’s take a hypothetical example: two employees, a man and a woman, are applying for a management position. Both are equally qualified in terms of education and experience, but their personalities differ. The male candidate scores high on emotional stability and low on agreeableness, traits associated with strong negotiation skills and assertiveness.

The female candidate scores higher on agreeableness and slightly lower on emotional stability. Despite their qualifications, the male candidate may be perceived as a better candidate for the position due to implicit biases about what makes a “good leader.” As a result, the male candidate may receive a higher salary offer, even if his job performance ends up being equivalent.

This scenario, supported by our results, highlights the importance of combating bias in hiring and salary setting practices.

Bridging the gap

What can be done to reduce these disparities? Our study suggests the following strategies.

1. Redefining workplace norms. Organizations can re-evaluate how they reward traits such as agreeableness and emotional stability. For example, valuing collaborative and empathetic leadership styles alongside assertiveness could create a more inclusive setting.
2. Provide negotiation training. Helping employees, particularly women, develop better negotiation skills could counteract some of the disadvantages associated with traits such as agreeableness. Role-playing exercises and workshops can enable workers to defend themselves effectively.
3. Address structural biases. Employers need to be aware of how implicit bias influences hiring, promotion and compensation decisions. Conducting regular audits of compensation practices and implementing standardized evaluation criteria can help ensure fairness.

Our results lead to a critical conclusion: personality matters. But it doesn’t have to perpetuate inequality. Qualities such as agreeableness and emotional stability are neither good nor bad in themselves, but their value in the workplace is often shaped by societal norms and organizational cultures. By tackling these biases, we can move towards a fairer labor market.

Recognizing the role of personality traits in changing salaries offers a new perspective for understanding the gender pay gap. This shifts the conversation from issues like education or work experience to more nuanced factors that influence how people navigate the job market.

This article is republished from The Conversation under a Creative Commons license. Read the original article.