Secular rise in economically valuable personality traits.

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.

Cross-border health and productivity effects of alcohol policies.

This paper studies the cross-border health and productivity effects of alcohol taxes. We estimate the effect of a large cut in the Finnish alcohol tax on mortality, alcohol-related illnesses and work absenteeism in Sweden. This tax cut led to large differences in the prices of alcoholic beverages between these two countries and to a considerable increase in cross-border shopping. The effect is identified using differences-in-differences strategy where changes in these outcomes in regions near the Finnish border are compared to changes in other parts of northern Sweden. We use register data where micro level data on deaths, hospitalisations and absenteeism is merged to population-wide micro data on demographics and labour market outcomes. Our results show that the Finnish tax cut did not have any clear effect on mortality or alcohol-related hospitalisations in Sweden. However, we find that workplace absenteeism increased by 9% for males and by 15% for females near the Finnish border as a result of the tax cut.