Abstract
This paper develops a framework of the role of interpersonal interactions in the labor market. Effective interpersonal interactions involve caring and directness. The ability to perform these tasks varies with personality and the importance of these tasks varies across jobs. An assignment model shows that people are most productive in jobs that match their style. An oversupply of one attribute relative to the other reduces wages for people who are better with the attribute in greater supply. We present evidence that youth sociability affects job assignment in adulthood. The returns to interpersonal interactions are consistent with the assignment model.
- Received May 2006.
- Accepted December 2006.
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