The long run effects of self-confidence on the labor market: A test on Hungarian data

Abstract

It is easy to see that highly fatalistic, low-efficacy persons believe that their actions have little outcome. Because a higher level of fatalism lowers an employee’s desired effort level, it may result in lower wages, while the antifatalistic attitude translates into more effective work – which in turn may be rewarded with a higher salary. The examined self-confidence scale is very similar to the most widely-used Rotter locus of control scale. People with a high level of self confidence are determined, feel that they have an influence on their future and are optimistic. In this article I examine not only the impact of this variable on wages, but also the human capital impact of self-confidence.