Why It Pays To Be An Optimist

Recent research finds evidence that optimism pays off in job hunting and promotions. Ron Kaniel, Cade Massey and David T. Robinson studied the effect of an optimistic disposition on M.B.A. students' job searches and then promotions in the two years after they graduated. Kaniel is an associate professor of finance at the Fuqua School of Business at Duke University; Massey is an assistant professor of organizational behavior at Yale School of Management; Robinson is a professor of finance and William and Sue Gross Distinguished Research Fellow at Fuqua.

Optimists fared better than their less-optimistic peers in some important ways, the researchers report in their September 2010 National Bureau of Economic Research working paper, "The Importance of Being an Optimist: Evidence from Labor Markets." For one thing, the optimistically inclined MBA students found comparable jobs to their peers--but found them more easily, with less-intensive job searches. What's more, two years after graduation the optimists were more likely than their less-optimistic peers to have been promoted.

The better job-hunting performance didn't appear to occur because the optimists had information that might objectively lead them to believe they would do better. For example, when the researchers asked the MBA students about their likely salary package in their first job, the optimists tended to predict that their starting earnings would be higher than average for their peers--but the optimists didn't, in fact, end up with above-average starting salaries. Kaniel, Massey and Robinson also asked the MBA students in the study to identify those students in their MBA section who were the most charismatic, the most likely to become CEOs or the most optimistic--to try to see if optimistic students were optimistic because they were more personable. In general, optimists did turn out to be perceived by their peers as more charismatic, but that accounted for only a fraction--approximately one-third at most--of the optimists' greater success in the labor market.

To what is the rest of that success attributable? Kaniel, Massey and Robinson can't say for sure, but they note that other research has suggested that people who are optimistic by disposition are good at coping with problems and flexible about trying new courses of action when needed. And, the authors point out, there is the possibility of self-fulfilling prophecies. Interestingly, the researchers note that their findings suggest that appearing to others to be optimistic if you're not would yield some--though not all--of the job-hunting benefits of a naturally optimistic disposition.

Kaniel, Massey and Robinson's "The Importance of Being an Optimist" working paper is available for download here. Some groups, such as subscribers to NBER's Working Paper Series and residents of developing countries, can download the working paper for free. Otherwise, you can download a copy of the working paper for $5.

This article is adapted from "Why It Pays To Be an Optimist" by Martha E. Mangelsdorf, which appeared in the Winter 2011 issue of MIT Sloan Management Review. Copyright Massachusetts Institute of Technology, 2011. All rights reserved.

Thanks to Martha E. Mangelsdorf / MIT Sloan Management Review