A model of how personality traits affect household time and resource allocation decisions and wages is developed and estimated. In the model, households choose between two modes of behavior: cooperative or noncooperative. Spouses receive wage offers and allocate time to supplying labor market hours and to producing a public good. Personality traits, measured by the so-called Big Five traits, can affect household bargaining weights and wage offers. Model parameters are estimated by Simulated Method of Moments using the Household Income and Labor Dynamics in Australia (HILDA) data. Personality traits are found to be important determinants of household bargaining weights and of wage offers and to have substantial implications for understanding the sources of gender wage disparities.
D10: Household Behavior: General
J12: Marriage; Marital Dissolution; Family Structure; Domestic Abuse
J16: Economics of Gender; Non-labor Discrimination
J22: Time Allocation and Labor Supply
J31: Wage Level and Structure; Wage Differentials
J71: Labor Discrimination