Patience Capital and the Demise of the Aristocracy

Matthias Doepke () and Fabrizio Zilibotti ()

No 5106, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We model the decision problem of a parent who chooses an occupation and invests in the patience of her children. The two choices complement each other: patient individuals choose occupations with a steep income profile; a steep income profile, in turn, leads to a strong incentive to invest in patience. In equilibrium, society becomes stratified along occupational lines. The most patient people are those in occupations requiring the most education and experience. The theory can account for the demise of the British land-owning aristocracy in the nineteenth century, when rich landowners proved unable to profit from new opportunities arising with industrialization, and were thus surpassed by industrialists rising from the middle classes.

Keywords: British aristocracy; capital accumulation; discount factor; income distribution; Industrial Revolution; patience (search for similar items in EconPapers)
JEL-codes: N23 O14 O15 Z10 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev, nep-dge and nep-his
Date: 2005-06
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