The Return to Non-Cognitive Skills on the Russian Labour Market

The study focuses on non-cognitive skills and their influence on earnings on the Russian labour market. The question of personality impact on labour market outcomes was not researched on the Russian data yet. The paper studies the return to personality in general and depending on a sector of the economy – public or private – in which a person has their main job. This research is conducted using a panel data approach: pooled OLS models as benchmarks and random-effects models were applied. Fixed-effects models were not used as they do not take into account time-invariant variables which non-cognitive skills are considered to be because of their nature stable over a 5-year period of time. As a result of the study, a significant connection between personality traits and income was detected. Openness and neuroticism have shown to be highly influential over wages with openness being positively related to earnings and neuroticism – negatively. Contrary to previous research, conducted on the data from other countries, this study reports agreeableness to be almost completely insignificant for earnings whereas extraversion, which is usually not found important, on Russian data was shown otherwise. Additionally, sustainable gender and sector differences in personality impact on wages were found as well.