November 2014

IZA DP No. 8678: Locus of Control and the Labor Market

published in: IZA Journal of Labor Economics, 4:3, 19 February 2015, doi:10.1186/s40172-014-0017-x.

This paper reviews the role of locus of control in the labor market. I begin with a discussion of the conceptual origins of locus of control, including its relationship to related concepts such as self-efficacy, motivation, and self-control. The relationship between locus of control and labor market success is then summarized. In doing so, I pay careful attention to what we know about three potential mechanisms – human capital investments, hiring decisions, and optimal incentive contracts – through which locus of control might operate. Finally, the broader implications of these relationships for public policy and future research are discussed.