Occupational Mobility across Generations: a Theoretical Model with an Application to Italy

In this paper we study the decision of rms operating in areas where organised crime is pervasive to resist the extortion racket. To this purpose we design a case-control study starting from the unique ex-perience of Addiopizzo (AP), an NGO operating in Palermo (Sicily) which, from 2004, invites rms to resist to the racketeers and join a public list aimed at eliciting critical consumption in favour of rms in the list. We study the determinants of the decision to join AP by estimating a two-level logistic regression model. We nd that rm's total assets and rm's age have a negative effect on the probability of joining AP, while a higher level of human capital embodied in the rm and a higher number of employees increases such probability. Among the district-level variables, we nd that the share of district population reduces the probability to join, while a higher level of socio-economic development, including education levels, increase the probability. We posit that these results support the hypothesis that the decision to join AP is based on a cost-bene t analysis and discuss policy implications of our results. This paper proposes a simple theoretical model to identify the main determinants of intergenerational occupational mobility with an application to Italian data. We assume that occupational mobility is described by a Markov matrix and that three factor affect the occupational choice of an individual: the income incentives of each occupation, the family background and the occupational structure. The empirical application of the proposed model to a sample of Italian families describes Italy as a less mobile country, and in particular we show that occupational mobility decreases for children born between 1966 and 1976. This result is due to the worsening of opportunities. The estimate of three synthetic indexes confirms the decease of mobility.