Due to its extraordinary explanatory power for individual behavior, the interest in the concept of locus of control (LOC) has increased substantially within applied economic research. But, even though LOC has been found to affect economic behavior in many ways, the reliability of these findings is at risk as they commonly rely on the assumption that LOC is stable over the life course. While absolute stability has been generally rejected, the extent to which LOC and thus personality changes is, nonetheless, strongly debated. We contribute to this discussion by analyzing the effect of unemployment on LOC. Based on German panel data, we apply a difference-in-difference approach by using an involuntary job loss as trigger for unemployment. Overall, we find a significant shift in stated LOC due to unemployment. Because the effect is observable during unemployment only and not heterogeneous with respect to individual characteristics or unemployment duration, we conclude that only the stated LOC is biased during unemployment but the underlying personality trait itself is not affected.
It’s a great pleasure for me to start being a full-time researcher again after returning from maternity leave with participating in the 6th Lindau Meeting on Economic Sciences in the end of August 2017.
My very first discussion paper on “Job Search, Locus of Control and Internal Migration”, which is joint work together with Marco Caliendo, Deborah Cobb-Clark and Arne Uhlendorff is now downloadable from the IZA Discussion Paper Series (No. 9600).
I am very happy to be able to visit the Behavioural Science Center at the University of Stirling (Scotland, UK) from the 30th of November to the 04th of December 2015. It is my second research visit there and hopefully becomes a great “end of the year”-tradition 🙂
I will participate in a workshop on the topic “Economics in the digital context” at the Leibniz Information Centre for Economics (ZBW) in Hamburg this Friday. I am really looking forward to inspiring discussions. @ZBW_news