The psychology of pay: How personality traits can influence salary

CAMBRIDGE, United Kingdom — Why do women still earn less than men in 2024? Despite decades of progress toward workplace equality, a stubborn gender wage gap persists, with women earning about 25% less than their male counterparts. While factors like education and work experience explain part of this disparity, a substantial portion has remained mysteriously unexplained – until now. A new study suggests that personality differences between men and women may play a much bigger role in wage inequality than previously thought.

The research, conducted by University of Cambridge economists Christopher Flinn, Petra Todd, and Weilong Zhang, takes a novel approach to understanding how personality traits influence success in the workplace. Rather than just looking at raw wage differences, they examined how the “Big Five” personality traits – openness to experience, conscientiousness, extraversion, agreeableness, and emotional stability – affect everything from salary negotiations to job hunting behavior.

The Big Five personality framework has become the gold standard in psychology for measuring core aspects of human personality. Openness reflects curiosity and creativity; conscientiousness captures organization and work ethic; extraversion measures sociability; agreeableness reflects cooperation and compassion; and emotional stability (the opposite of neuroticism) indicates resilience and calm under pressure.

Using data from the German Socio-Economic Panel, which surveyed nearly 11,000 households and more than 20,000 individuals between 2013-2019, the researchers analyzed a final sample of 6,683 workers between 25 and 60 years-old. They found striking differences in how men and women score on these traits. Women tend to rate higher on agreeableness and lower on emotional stability – and these particular trait differences appear to put them at a significant disadvantage in the workplace, especially when it comes to negotiating higher wages.

The study found that more agreeable people – those who are cooperative, sympathetic, and eager to please others – tend to have lower wages and take longer to find new jobs when unemployed.

“Here’s the twist – women generally score higher in traits like agreeableness, which is often associated with social harmony. Yet this trait can result in lower wages due to reduced bargaining power,” Zhang explains in a commentary on The Conversation. “[A]greeableness, despite its social benefits, turns out to be a financial liability. Highly agreeable people tend to avoid conflict, which can make them less assertive in negotiations.”

Meanwhile, emotional stability emerged as a crucial trait for workplace success, associated with higher wages and more stable employment. The fact that women score differently than men on these specific traits explains nearly 20% of the gender wage gap, according to the researchers’ analysis.

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

The research found that conscientiousness – being organized, responsible, and hardworking – leads to better outcomes for both men and women, increasing wages by 6.8% for men and 5.3% for women. Women actually score slightly higher on this trait on average, which helps narrow the wage gap somewhat, though not enough to overcome the disadvantages from other trait differences.

Before jumping to conclusions about innate gender differences, however, it’s important to note that personality traits are shaped by both nature and nurture. Girls are often socialized from an early age to be more agreeable and accommodating, while boys are typically encouraged to be more assertive. These learned behaviors can become ingrained personality traits that carry into adulthood and the workplace.

The good news is that personality traits aren’t completely fixed. The researchers point to evidence from clinical psychology studies showing that personality traits can be modified through therapeutic treatments. Their analysis suggests that providing mental health interventions to individuals with low emotional stability could shrink the gender wage gap by 2-6%.

The study also found that education and cognitive ability, while important for career success, explain surprisingly little of the gender wage gap when personality traits are taken into account. In fact, gender differences in education levels and cognitive skills tend to reduce the wage gap rather than contribute to it. This suggests that traditional approaches focused solely on equalizing educational and training opportunities may be insufficient for achieving wage parity.

Of course, addressing personality-based wage disparities raises complex questions about both individual and institutional change. The researchers emphasize that their goal is not to suggest women should change their personalities but rather to illuminate how certain personality traits affect labor market outcomes.

Their findings, published in The Journal of Political Economy, could help shape more effective policies for achieving workplace equality. Rather than focusing exclusively on discrimination or differences in qualifications, interventions might also target the subtle ways that personality influences career trajectories and compensation.

“Our findings point to a critical conclusion: personality matters,” writes Zhang. “But it doesn’t have to perpetuate inequality. Traits like agreeableness and emotional stability are not inherently good or bad, but their value in the workplace is often shaped by societal norms and organizational cultures. By addressing these biases, we can move towards a more equitable labor market.”