The malleability of personality traits in adolescence

Models of economic decision-making usually assume that personality is stable over time. We assess the validity of this assumption in adolescence and young adulthood using nationally representative panel data from Australia. Our study shows that mean changes in personality traits are moderate because most individuals do not change their scores in a statistically reliable way during adolescence and young adulthood, or changes occur in equal proportions in opposite directions. The largest changes over an eight-year window are found for conscientiousness. Its average increase implies a 7% rise in the probability of obtaining a university degree – equivalent to a $7,800 net increase in lifetime earnings. Youth also reduce on average their external locus-of-control and extraversion, and increase their agreeableness and emotional stability. Important gender differences emerge for changes in openness to experience with increases in this trait over time for males and decreases for females. Moreover, an examination of the extent to which personality responds to personal or environmental shocks indicates that intra-individual trait changes are not systematically predicted by one-off life events. However, the experience of repeated health problems increases external control perceptions and reduces agreeableness – altering the normal maturation process of the two traits; we demonstrate that the size of this effect is economically meaningful.