October 2016

IZA DP No. 10337: Personality and Mental Health: The Role and Substitution Effect of Emotional Stability and Conscientiousness

A growing number of economic studies show that low emotional stability is typically negatively related to socioeconomic outcomes, while conscientiousness predicts desirable results. However, possible mechanisms behind these relations are far less explored. Gaining insights into the mechanisms is important, because this knowledge is crucial to develop pre- and intervention programs. We address this research gap by analyzing the relation between low emotional stability and mental ill-health as well as the possible substitution effect of conscientiousness both theoretically and empirically. Using the British Cohort Study, we find that low emotional stability at ages 10 and 16 significantly predicts mental ill-health at ages 16, 26, 30, 34 and 42 and that more conscientiousness significantly mitigates the negative relation between low emotional stability and mental health. Our results suggest that particularly both low emotionally stable and low conscientious individuals are more likely to experience mental ill-health related to a reduced problem-solving ability.