This paper develops a framework to understand the role of interpersonal
interactions in the labor market including task assignment and wages.
Effective interpersonal interactions involve caring, to establish
cooperation, and at the same time directness, to communicate in an
unambiguous way. 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 and earn less when they have to shift to other jobs.
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
Keywords: Interpersonal Interactions; Wage Level and Structure; Assignment JEL codes: J21; J24; J31
UNU-MERIT Working Papers ISSN 1871-9872