How your personality “acts as an invisible architect for your career,” according to new research
Are you willing to wait for a bigger payoff? Researchers studying young Danes found that the more patient ones tended to apply to longer degree programs with steeper earnings growth, even after accounting for grades and family background.
New research published in PNAS suggests that a person's personality traits can play a significant role in shaping their career path and educational choices. The study, conducted by an international team of six economists, found that young adults who prioritize larger long-term financial rewards tend to apply to college programs with longer study durations and higher earning potential, while those who are more risk-averse tend to choose fields with more predictable salaries.
The researchers examined how fundamental economic preferences, such as patience and attitudes toward risk, predict real-world educational investments. Patience refers to an individual's willingness to wait for larger rewards in the future, while risk aversion describes a preference for stable outcomes over uncertain prospects that come with financial risks.
In economics, these two traits are central to decisions regarding human capital, which treats education as an investment where students spend years gaining skills to earn higher wages later in life. The study's findings align with this framework, indicating that individuals who value future rewards are more likely to postpone earnings and complete longer degrees.
To test these theories, the researchers measured participants' patience and risk aversion through online experiments. For patience, participants were presented with 16 financial choices, deciding whether to receive money earlier or save it for a larger sum later. For risk aversion, participants faced 15 investment scenarios, choosing between a guaranteed amount or a lottery with a chance at a higher return but also the risk of loss.
Participants were ranked from 1 to 100 on a percentile scale based on their average savings rate and risk aversion.
The researchers then linked these experimental rankings to official Danish educational records, identifying each student's first-priority higher-education application. They characterized each program by its length, graduates' typical annual earnings growth, salary variation, and the share earning in the bottom fifth of earners.
The study found that a 10-percentile difference in applicants' average patience correlated to programs lasting about 1.5 years longer and offering 2.4 percentage points higher annual earnings growth. Conversely, programs with a higher share of risk-averse applicants had fewer graduates with very low earnings and less salary variation.
These findings suggest that individual economic preferences play a crucial role in shaping educational choices and career paths. The research highlights the importance of considering personality traits alongside academic performance and family background when analyzing postsecondary educational decisions.
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