Effects of positive attitude on earnings: Evidence from the US longitudinal data

To examine whether or not the worker's attitude to life affects his/her earnings, this study estimates wage equations with positive attitude as an explanatory variable under different econometric specifications. The results obtained from both cross-sectional and panel data confirm that positive and optimistic attitude to life influence the worker's wages positively, and that the magnitude of this effect is comparable to or even higher than the individual effects of the standard human capital variables on earnings. The study further demonstrates that in addition to its direct effects, positive attitude also affects earnings indirectly through its effects on schooling.