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Occupational Choice and Incentives: The Role of Family Background

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Abstract

A model of occupational choice and human capital investment is developed and tested. The model allows family background to influence occupational choice via access to economic resources, differences in costs of schooling, and ability uncertainty. The model predicts that people are more sensitive to economic incentives when considering occupations that are different from the parental occupation. It also predicts that the occupational choice of individuals from poor background is more sensitive to economic incentives than the occupational choice of well off individuals. These implications are confirmed on Swedish data using a mixed multinomial logit framework, explicitly accounting for unobserved heterogeneity.

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  • Sjögren, Anna, 2000. "Occupational Choice and Incentives: The Role of Family Background," Working Paper Series 539, Research Institute of Industrial Economics.
    • Handle: RePEc:hhs:iuiwop:0539
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    7. Mattila, J. Peter & Orazem, Peter, 1991. "Human Capital, Uncertain Wage Distributions, and Educational and Occupational Choices," Staff General Research Papers Archive 10841, Iowa State University, Department of Economics.
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    Cited by:

    1. Haupt, Alexander, 2012. "The evolution of public spending on higher education in a democracy," European Journal of Political Economy, Elsevier, vol. 28(4), pages 557-573.
    2. Eliasson, Kent, 2006. "The Effects of Accessibility to University Education on Enrollment Decisions, Geographical Mobility, and Social Recruitment," Umeå Economic Studies 690, Umeå University, Department of Economics.
    3. Emran, M. Shabe & Otsuka, Misuzu & Shilpi, Forhad, 2003. "Gender, generations, and nonfarm participation," Policy Research Working Paper Series 3087, The World Bank.

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    More about this item

    Keywords

    Economic incentives; Family background; Intergenerational mobility; Mixed multinomial logit; Occupational choice;
    All these keywords.

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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