Two Economists' Musings on the Stability of Locus of Control
The authors are grateful for helpful comments from Angela Duckworth, Shelly Lundberg, Steven Stillman, and participants of the 2010 IZA/SOLE Transatlantic Meeting, of the 2011 Labour Econometrics Workshop, of the 2012 Society of Labor Economists' meeting, and of a brown-bag seminar at the Positive Psychology Centre, University of Pennsylvania (2012), as well as for financial support from an Australian Research Council Discovery Programme Grant (DP110103456). This article uses unit record data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey, which is a project initiated and funded by the Australian Government Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) and is managed by the Melbourne Institute of Applied Economic and Social Research. The findings and views reported in this article, however, are those of the authors and should not be attributed to either FaHCSIA or the Melbourne Institute.
Empirical studies of non-cognitive skills often rely on the assumption that these skills are stable over time. We analyse the change in a specific non-cognitive skill, that is locus of control, to assess the validity of this assumption directly. We find that short- and medium-run changes in locus of control are modest on average, are concentrated among the young or very old, are unlikely to be economically meaningful and are not related to demographic, labour market and health events. Still, there is no evidence that locus of control is truly time-invariant and the use of lagged measures could result in a substantial attenuation bias.