Locus of Control and the Labor Market

Melbourne Institute Working Paper No. 25/14

Date: 2014

Author(s):

Deborah A. Cobb-Clark

Abstract

This paper reviews the role of locus of control in the labor market. I begin with a discussion of the conceptual origins of locus of control, including its relationship to related concepts such as self-efficacy, motivation, and self-control. The relationship between locus of control and labor market success is then summarized. In doing so, I pay careful attention to what we know about three potential mechanisms – human capital investments, hiring decisions, and optimal incentive contracts – through which locus of control might operate. Finally, the broader implications of these relationships for public policy and future research are discussed.

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  • Locus of control, labor markets, non-cognitive skills, behavioral labor economics