Locus of Control and Cumulative (Dis-)Advantage in the Labor Market

The relationship between Locus of Control (LoC) and occupational outputs has already been shown in several cross-sectional studies. The belief to have control over the achievement of the own goals, as do people with internal LoC, seems to be an important property for the career opportunities. Thus, people with an internal LoC get more pay, and take higher vocational positions in the average. This paper, however, has a longitudinal perspective and investigates the mutual influence between labor market experience and the development of LoC. More specifically it is assumed that there is an accumulation of (dis-)advantages for people with an external locus of control. In this case the external locus of control leads to worse employment opportunities and the worse employment opportunities leads then to a strengthening of the external LoC over time. On the other hand, an accumulation of advantages could be assumed for people with a stronger internal LoC.

The analysis is based on household panel data from the German Socio Economic Panel (SOEP) for the years 1999-2010. The SOEP includes a multi-item scale which measures the LoC in the years 1999, 2005 and 2010. In addition, the SOEP contains much information about the employment history, so that the employment situation can be modeled in detail.  

On the basis of “Fixed-Effects-Models” I estimate the effects of labor market outcomes, like unemployment or the decrease of income, on a possible change in the locus of control over time. First results show that a deterioration in the individual labor market situation leads to an increase of an external LoC. The assumption of the accumulation of (dis-)advantages can so be confirmed on the basis of the previous analysis.