Borghans, L., ter Weel, B.J. (2011). Computers, skills and wages. Applied Economics, 43(29), 4607-4622.
Computer technology is most prominently used by skilled, high-wage workers. This suggests that computer use requires skills to take full advantage of the possibilities, which are particularly present among relatively skilled workers. This article develops a simple technology adoption model showing that the decision to adopt computer technology depends on (i) the tasks to be performed, (ii) the level of skill or education and (iii) the level of wages. Applying this model to British data, it is shown that the effect of wages and particular tasks on computer adoption is larger than the effect of skills on adoption. The estimates suggest that in Britain computer use is likely to be a matter of cost efficiency and not so much of workers’ skills.
Evidence about job mobility outside the U.S. is scarce and difficult to compare crossnationallybecause of non-uniform data. We document job mobility patterns of collegegraduates in their first three years in the labor market, using unique uniform datacovering 11 European countries and Japan. Using the NLSY, we replicate the informationin this survey to compare the results to the U.S. We find that (1) U.S. graduates hold morejobs than European graduates. (2) Contrasting conventional wisdom, job mobility inJapan is only somewhat lower than the European average. (3) There are large differencesin job mobility within Europe.
Dohmen, T.J., Falk, A., Fliessbach, K., Sunde, U. & Weber, B. (2011). Relative versus absolute income, joy of winning, and gender: brain imaging evidence. Journal of Public Economics, 95, 279-285.
In this paper we study the role of absolute versus relative income using functional magnetic resonance imaging (fMRI). While being scanned in two adjacent MRI scanners, pairs of subjects had to simultaneously perform a simple estimation task that entailed monetary rewards for correct answers. We show that a variation in the comparison subject’s payment affects blood oxygenation level-dependent (BOLD) responses in the ventral striatum. This brain region is engaged in the prediction and registration of primary rewards such as food delivery as well as more abstract forms of rewards like money. In particular, we show that activation in the ventral striatum increases in absolute income and – for a given level of absolute income – decreases in lower relative income. Using a male and a female sample allows us to study whether the perception of relative and absolute incomes is gender specific. We find that the effects of absolute and relative incomes are strong and relatively similar for both genders. Finally, we analyze the importance of “”joy of winning””, i.e., the impact of outperforming another subject. Our results suggest that the mere fact of outperforming the other subject positively affects reward related brain areas.
Dohmen, T. J. & Falk, A. (2010). You get what you pay for; Incentives and selection in the education system. Economic Journal, 120(546), 256-271.
We analyse worker self-selection, with a special focus on teachers, to explore whether worker composition is generally endogenous. We analyse laboratory experimental data to provide causal evidence on particular sorting patterns. Our field data analysis focuses specifically on selection patterns of teachers. We find that teachers are more risk averse than employees in other professions, indicating that relatively risk averse individuals sort into teaching occupations under the current system. Using survey measures on trust and reciprocity we find that teachers trust more and are less negatively reciprocal than other employees, and establish differences in personality based on the Big Five concept.
Dohmen, T. Falk, A., Huffman, D., Marklein, F., Sunde, U., 2009. Biased probability judgment: Evidence of incidence and relationship to economic outcomes from a representative sample, Journal of Economic Behavior & Organization, 72, 903-915.
Many economic decisions involve a substantial amount of uncertainty, and therefore crucially depend on how individuals process probabilistic information. In this paper, we investigate the capability for probability judgment in a representative sample of the German population. Our results show that almost a third of the respondents exhibits systematically biased perceptions of probability. The findings also indicate that the observed biases are related to individual economic outcomes, which suggests potential policy relevance of our findings.
Dohmen, T., Falk, A., Huffman, D., Sunde, U. 2009. Homo Reciprocans: Survey evidence on behavioural outcomes. The Economic Journal, 119 (March), 592-612.
This article complements the experimental literature that has shown the importance of reciprocity for behaviour in stylised labour markets or other decision settings. We use individual measures of reciprocal inclinations in a large, representative survey and relate reciprocity to real world labour market behaviour and life outcomes. We find that reciprocity matters and that the way in which it matters is very much in line with the experimental evidence. In particular, positive reciprocity is associated with receiving higher wages and working harder. Negatively reciprocal inclinations tend to reduce effort. Negative reciprocity increases the likelihood of being unemployed.
Borghans, L., ter Weel, B., Weinberg, B.A., 2008. Interpersonal Styles and Labor Market Outcomes. The Journal of Human Resources, p.815-858
This paper develops a framework of the role of interpersonal interactions in the labor market. Effective interpersonal Interactions involve caring and directness. The ability to perform these tasks varies with personality and the importance of these tasks varies across jobs. An assignment model shows that people are most productive in jobs that match their style. An oversupply of one attribute relative to the other reduces wages for people who are better with the attribute in greater supply. We present evidence that youth sociability affects job assignment in adulthood. The returns to interpersonal interactions are consistent with the assignment model.
Borghans, L., Duckworth, A.L., Heckman, J.J., ter Weel, B., 2008. The Economics and Psychology of Personality Traits. The Journal of Human Resources, p.972-1059
This paper explores the interface between personality psychology and economics. We examine the predictive power of personality and the .stability of personality traits over the life cycle. We develop simple analytical frameworks for interpreting the evidence in personality psychology and suggest promising avenues for future research.
Borghans, L., Meijers, H., ter Weel, B., 2008. The role of noncognitive skills in explaining cognitive test scores. Economic Inquiry, 46(1), p. 2-12
This article examines whether noncognitive skills measured both by personality traits and by economic preference parametersâ€”influence cognitive tests performance. The basic idea is that noncognitive skills might affect the effort people put into a test to obtain good results. We experimentally varied the rewards for questions in a cognitive test to measure to what extent people are sensitive to financial incentives. To distinguish increased mental effort from extra time investments, we also varied the questions time constraints. Subjects with favorable personality traits such as high performance motivation and an internal locus of control perform relatively well in the absence of rewards, consistent with a model in which trying as hard as you can is the best strategy. In contrast, favorable economic preference parameters (low discount rate, low risk aversion) are associated with increases in time investments when incentives are introduced, consistent with a rational economic model in which people only invest when there are monetary returns. The main conclusion is that individual behavior at cognitive tests depends on noncognitive skills.
Dohmen, T, 2008. The Influence of Social Forces:Evidence from the Behavior of Football Referees, Economic Inquiry, vol. 46, no. 3, pp. 411-424.
Analyzing the neutrality of referees during 12 German premier league (1. Bundesliga) soccer seasons, this paper documents evidence that social forces influence agents’ decisions. Referees, who are appointed to be impartial, tend to favor the home team by systematically awarding more stoppage time in close matches in which the home team is behind. They also favor the home team in decisions to award goals and penalty kicks. Crowd composition affects the size and the direction of the bias, and the crowd’s proximity to the field is related to the quality of refereeing.
Dohmen, T., Falk, A., Huffman, D., Sunde, U. 2008. Representative trust and reciprocity: Prevalence and determinants. Economic Inquiry, 46(1), p. 84-90
This paper provides evidence about the determinants of trust and reciprocal inclinations, that is, a tendency for people to respond in kind to hostile or kind actions, in a representative setting. We investigate the prevalence of reciprocity in the population, the correlation between trust and positive and negative reciprocal inclinations within person, the individual determinants of reciprocity, and the relationship with psychological measures of personality. We find that most people state reciprocal inclinations, in particular in terms of positive reciprocity, as well as substantial heterogeneity in the degree of trust and reciprocity. Trust and positive reciprocity are only weakly correlated, while trust and negative reciprocity exhibit a negative correlation. In terms of determinants, being female and increasing age are associated with stronger positive and weaker negative reciprocal tendencies. Taller people are more positively reciprocal, but height has no impact on negative reciprocity. Psychological traits also affect trust and reciprocity.
Dohmen, T., S. Altmann, and M. Wibral, 2008. Do the Reciprocal Trust Less?, Economics Letters, vol. 99, pp. 454-457.
We study the intrapersonal relationship between trust and reciprocity in a laboratory experiment. Reciprocal subjects trust significantly more than selfish ones. This finding raises questions about theories of social preferences which predict that fairer players should trust less.