Matti Sarvimäki

Secular rise in economically valuable personality traits

Significance The secular rise in intelligence across birth cohorts is one of the most widely documented facts in psychology. This finding is important because intelligence is a key predictor of many outcomes such as education, occupation, and income. Although noncognitive skills may be equally important, there is little evidence on the long-term trends in noncognitive skills due to lack of data on consistently measured noncognitive skills of representative populations of successive cohorts. Using test score data based on an unchanged test taken by the population of Finnish military conscripts, we find steady positive trends in personality traits that are associated with high income. These trends are similar in magnitude and economic importance to the simultaneous rise in intelligence. Although trends in many physical characteristics and cognitive capabilities of modern humans are well-documented, less is known about how personality traits have evolved over time. We analyze data from a standardized personality test administered to 79% of Finnish men born between 1962 and 1976 (n = 419,523) and find steady increases in personality traits that predict higher income in later life. The magnitudes of these trends are similar to the simultaneous increase in cognitive abilities, at 0.2–0.6 SD during the 15-y window. When anchored to earnings, the change in personality traits amounts to a 12% increase. Both personality and cognitive ability have consistent associations with family background, but the trends are similar across groups defined by parental income, parental education, number of siblings, and rural/urban status. Nevertheless, much of the trends in test scores can be attributed to changes in the family background composition, namely 33% for personality and 64% for cognitive ability. These composition effects are mostly due to improvements in parents’ education. We conclude that there is a “Flynn effect” for personality that mirrors the original Flynn effect for cognitive ability in magnitude and practical significance but is less driven by compositional changes in family background.

Integrating Immigrants: The Impact of Restructuring Active Labor Market Programs

We examine the impact of restructuring active labor market programs for unemployed immigrants in Finland. Exploiting a discontinuity in the phase-in rules of the reform, we find that it increased compliers’ cumulative earnings by 47% over a 10-year follow-up period. We attribute these improvements to a more efficient use of existing resources. The reform did not affect total days in training, but it did modify the content toward training specifically designed for immigrants.

The Evolution of Social Mobility: Norway during the Twentieth Century

We document trends in social mobility in Norway using intergenerational income elasticities, the associations between the income percentiles of fathers and sons, and brother correlations. The results of all approaches suggest that social mobility increased substantially between cohorts born in the early 1930s and the early 1940s. Father–son associations remained stable for cohorts born after World War II, while brother correlations continued to decline. The relationship between father and son income percentile ranks is highly non‐linear for early cohorts, but it approaches linearity over time. We discuss increasing educational attainment among low‐ and middle‐income families as a possible mechanism underlying these trends.

Nordic Economic Policy Review : Labour Market Integration in the Nordic Countries

What can we learn from each other and others? Since the mid-eighties the Nordic countries have received a high influx of refugees relative to the population size. Currently these countries receive ...

Labor Market Integration of Refugees in Finland

This paper documents Finland’s policy response to the increase in asylum applications in 2015 and the labor market performance of earlier immigrants living in Finland. Immigrants born in Afghanistan, Iraq and Somalia had substantially lower employment rates, earned less and received more social benefits than other immigrant groups or natives in 1990–2013. The immigrant-native gaps in employment and earnings decreased over time but remained large. Ten years after arriving in Finland, the average earnings of immigrant men from these countries were only 22–38 percent of the average earnings of native men of the same age. The relative earnings of women were even smaller. Furthermore, the difference in equivalence-scaled social benefits persisted over time despite the narrowing of earnings gaps.

Slipping through the Cracks of a Welfare State: Children of Immigrants in Finland

We document large differences in educational attainment, criminal sentences and use of psychotropic medication between the children of immigrants and natives living in Finland. Among the offspring of immigrants from the OECD countries and the former Soviet Union, the disadvantage in education reverses and differences in criminal sentences disappear once we condition on parental income and location of residence. In contrast, large gaps remain for the children of immigrants from other regions, even conditional on background characteristics. Furthermore, the children of immigrants from all source areas are substantially less likely to use psychotropic medication than the offspring of natives despite their higher self-reported mental health problems. These results suggest that institutions designed to help disadvantaged natives do not fully reach the children of immigrants.