6.1 The Big Five Socioemotional Skills

BOX 6.1 The Big Five Socioemotional Skills Socioemotional skills can be categorized in several ways, but the Big Five categorization is among the most common and often features in empirical analyses of socioemotional skills and labor market outcomes. The Big Five aims to capture personality traits, such as perseverance, self-control, trust, self-esteem, empathy, hostility, and the ability to engage productively in society (Heckman, Jagelka, and Kautz 2019). The Big Five includes the following: (1) agreeableness, which is the willingness to help people and act in accordance with other people’s interests, as well as the degree to which an individual is cooperative, warm, and agreeable rather than cold, disagreeable, and antagonistic; (2) conscientiousness is the preference for following rules and schedules and for keeping engagements and the attitudes associated with being hardworking, organized, and dependable, as opposed to lazy, disorganized, and unreliable; (3) emotional stability encompasses dimensions such as nervous versus relaxed and dependent versus independent and addresses the degree to which the individual is insecure, anxious, depressed, and emotional rather than calm, self-confident, and cool; (4) extroversion is the preference for human contacts, empathy, gregariousness, and assertiveness and the wish to inspire people; and (5) openness measures the degree to which a person needs intellectual stimulation, change, and variety (Brunello and Schlotter 2011). The data on the Big Five are self-reported, and this process may induce a reference bias. For example, West et al. (2016), using longitudinal data, find paradoxical results in their study on eighth graders. They find that conscientiousness, self-control, and grit are positively related with test score gains but that this relationship disappears at the school level. They conclude that, with the changing circumstances, respondents redefine their notion of the meaning of conscientiousness or grit and therefore may rate themselves more critically. Because the value of these skills may vary across cultures and labor markets, any analysis using these measures should be contextualized to explain their relevance. Moreover, most of the research on socioemotional skills is based on data from highincome countries; so, it is unclear how much socioemotional skills matter in the labor markets of low-income countries.

The literature is mixed on the relative importance to earnings of cognitive versus socioemotional abilities. This is difficult to distinguish because people with high socioemotional skills also tend to have high levels of both cognitive skills and education. Socioemotional skills tend to be rewarded in the formal education system. For example, the researcher who controls for cognitive skills and coursework mastery discovers that the grades awarded by middle-school teachers are influenced by behaviors, such as paying more attention in class, spending more time on homework, completing homework, and avoiding disruptive conduct in class (Farkas 1996; Lleras 2008). In US data, Lleras (2008) finds that high-school students who have better social skills and work habits are more likely to complete higher levels of education. It is possible that socioemotional skills indirectly lead to higher cognitive abilities through behaviors, such as motivation and conscientiousness, that would make students study more assiduously and pay more attention to the tests that measure cognitive abilities (Borghans et al. 2016). Evidence suggests that high cognitive test scores are associated not only with high cognitive skills but also with socioemotional attributes, such as high motivation (Brunello and Schlotter 2011).

A few studies present evidence that greater socioemotional skills are associated with better labor market outcomes in developing countries. Gunewardena et al. (2018) use STEP surveys in Armenia, Bolivia, Colombia, Georgia, Ghana, Kenya, Serbia, Ukraine, and Vietnam to find statistically significant relationships between cognitive and socioemotional skills and earnings. Cunningham, Acosta, and Muller (2016) find that socioemotional skills influence labor force participation and tertiary education attendance in Bolivia, Colombia, El Salvador, and Peru. In Colombia, adults with higher cognitive and socioemotional skills do better in the labor market, where socioemotional skills impact outcomes through various channels (Acosta, Muller, and Sarzosa 2020).

The evidence on the role of socioemotional skills in labor market outcomes in South Asia remains underexplored more generally, but there are a few studies on Bangladesh. Nomura and Adhikari (2017) find a positive correlation between emotional stability and wages and a negative correlation between grit and wages among employees of formal sector manufacturing firms in Bangladesh. Hilger, Nordman, and Sarr (2018) find that workers in Bangladesh hired over formal channels benefit from higher returns to openness to experience, while workers hired through networks enjoy higher wages for greater levels of emotional stability. Kotikula, Hill, and Raza (2019) find that, among poor workers in slum and nonslum areas of Dhaka, Bangladesh, socioemotional skills influence the choice of employment but not necessarily earnings. They also find that women workers who are better at adapting to changes or who are more self-disciplined are more likely to engage in wage employment, whereas women who are more persistent and willing to persevere through challenges are more likely to be self-employed. These patterns may reflect the impact of Bangladesh’s sociocultural dynamics and structure on firm management practices and the extent to which production workers are expected to be compliant with management directives.

The relationship between agreeableness and labor market outcomes is two-sided. Agreeableness implies cooperation and compassion and is often correlated with low levels of criminal behavior, strong social networks, and higher levels of community involvement. It has an inconsistent relationship, however, with educational achievement because its facets may influence academic success in various ways. Its positive impact is mostly observed in adverse environments where agreeableness prevents students from interacting with deviant peers or from engaging in antisocial behavior (Nieuwenhuis 2018). It also has a positive effect if strong social networks are able to help students perform better. However, the flexibility aspect of agreeableness negatively impacts educational outcomes (Noftle and Robins 2007). Similarly, Nießen et al. (2020) suggest that, because low agreeableness is often accompanied by high task orientation, which is relevant to success, higher levels of agreeableness lead to higher drop-out rates in vocational training programs.

Based on the studies on the relationship between socioemotional skills and labor market outcomes, one might expect that socioemotional skills are likely to be positively related to labor market outcomes, although distinguishing the influence of socioemotional skills from that of cognitive skills may be challenging. The next section tests these relationships in Pakistan and Sri Lanka.