Disentangling the within- and between-person effects of personality on income for men and women

Abstract

Understanding the relationship between personality and income is a topic of interest across multiple disciplines. Correlations between people’s personalities and their incomes may arise because differences in stable personalities relate to income differences (between-person effects) or because changes in personality or income are later reflected in the other variable (within-person effects). The current research uses random-intercept cross-lagged panel models to disentangle the two sorts of effects to better understand the relationship between the six factors of personality and income. Using data from 6824 working-age adults in New Zealand across 4 years, we found between-person effects showing higher incomes were obtained by both men and women who were more extraverted, agreeable and open, and less neurotic. Within-person effects showed that earning a higher income was associated with higher neuroticism and lower extraversion over time, while higher extraversion was associated with a lower income over time.