Occupational Choice and the Intergenerational Mobility of Welfare

Corina Boar and Danial Lashkari

No 29381, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: How does parental income shape labor market outcomes? Standard measures of intergenerational mobility typically focus on earnings as the main outcome, but parental income may also influence children’s access to more fulfilling careers. Using U.S. survey data, we show that children from higher-income families are significantly more likely to select occupations offering greater non-monetary qualities such as autonomy, intellectual stimulation, and workplace respect. To explain this pattern, we develop and estimate a model where parental resources allow children to prioritize occupational quality over earnings. When we adjust earnings to compensate for the monetary equivalent of these desirable qualities, intergenerational mobility falls by 15–35%, revealing that traditional income-based measures overstate the equality of opportunity. Finally, we document recent labor market shifts toward higher-quality occupations that raise our compensated measure of intergenerational mobility, suggesting structural changes that may have led to more equal distributions of opportunity.

JEL-codes: E2 J2 J6 (search for similar items in EconPapers)
Date: 2021-10
New Economics Papers: this item is included in nep-lab and nep-mac
Note: EFG
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Citations: View citations in EconPapers (8)

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Working Paper: Occupational Choice and the Intergenerational Mobility of Welfare (2022)
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