 42. Some Contributions of Economics to the Study of Personality 855
skills predict outcomes above and beyond 
their effects in predicting scores on achieve -
ment tests.8
This chapter provides an overview of the 
main findings from the study of personality 
by economists. It acquaints psychologists 
with recently developed economic frame -
works and the frontier of research in eco -
nomics. It challenges psychologists to make 
sharper measurements with conceptually 
stronger foundations.
The rest of the chapter is in three parts. 
We discuss issues of measurement in the first 
part. In the second part, we present evidence 
on the predictive power of personality skills. 
In the final part, we discuss research on skill 
formation.
Measuring Cognitive 
and Noncognitive Skills
Cognitive  Skills
Measures of cognition have been developed 
and refined over the past century. Cogni -
tive ability has multiple facets.9 Psycholo -
gists distinguish between fluid intelligence  
(the rate at which people learn) and crystal -
lized intelligence  (acquired knowledge).10 
Achievement tests are designed to capture 
crystallized intelligence,11 whereas IQ tests, 
like Raven’s progressive matrices (1962), are 
designed to capture fluid intelligence.12, 13
This new understanding of cognition is 
not widely appreciated by economists. Many 
use IQ tests, standardized achievement tests, 
and even grades as interchangeable mea -
sures of “cognitive ability” or intelligence.14 
Scores on IQ tests and standardized achieve -
ment tests are strongly correlated with each 
other and with grades.15 However, these 
general indicators of “cognition” measure 
different skills and capture different facets 
of cognitive ability.16, 17 Scores on these tests 
are also influenced by noncognitive skills 
and the amount of effort that a test taker 
exerts.
Measuring Noncognitive  Skills
We use the term noncognitive skills  to de -
scribe the personal attributes not thought 
to be measured by IQ tests or achievement tests. These attributes go by many names in 
the literature, including soft skills, person -
ality traits, noncognitive abilities, character 
skills, and socioemotional skills. These dif -
ferent names connote different properties.18 
Traits  suggests a sense of permanence and 
possibly also of heritability. Skills  suggests 
that these attributes can be learned. In re -
ality, the extent to which these personal 
attributes can change lies on a spectrum. 
Both cognitive and noncognitive skills can 
change and be changed over the life cycle, 
but through different mechanisms and with 
different ease at different ages. We use the 
term skill throughout this chapter precisely 
because all attributes can be shaped.
Personality psychologists have studied 
noncognitive skills for the past century. Psy -
chologists primarily measure noncognitive 
skills by using self-  reported surveys or ob -
server reports. They have arrived at a rela -
tively well-  accepted taxonomy of noncogni -
tive skills called the Big Five, well-known to 
readers of this volume. Some argue that the 
Big Five are the “longitude and latitude” of 
noncognitive skills, by which all more nar -
rowly defined skills may be categorized.19
While the Big Five measures are now wide -
ly used in psychology, there are several other 
taxonomies, including the Big Three, the 
Multidimensional Personality Questionnaire 
(MPQ), and the Big Nine, that are conceptu -
ally and empirically related to the Big Five.20 
Other taxonomies, including psychopathol -
ogy as measured by DSM-IV and measures 
of temperament, have also been related to 
the Big Five.21 In earlier research, Almlund 
et al. (2011) and Becker et al. (2012) summa -
rize evidence showing that economic prefer -
ence parameters are not closely related to the 
Big Five measures and apparently represent 
different attributes. Preference parameters 
along with the noncognitive skills measured 
by personality psychologists govern behav -
ior.22 Recent work by Jagelka (2018) chal -
lenges this research and establishes a much 
tighter link than previously thought by his 
more careful treatment of measurement 
error and modeling mistakes made by per -
sons being surveyed. The search is on for a 
minimal set of skills required to characterize 
empirically based human differences. The 
field is currently wide open.