The Wealth Effect in Occupational Choice

Yoram Weiss

No 424, Working Papers from Princeton University, Department of Economics, Industrial Relations Section.

Abstract: The purpose of this paper is to indicate regularities in the area of occupational choice using income-leisure analysis. A simple one-period model is used to examine the effect of changes in nonhuman and human wealth on the choice of an occupation. It is argued that under certainty: An increase in nonwage income will increase the propensity to choose pleasant low-paying work activities. An increase in human capital will also induce a choice of pleasant work activities if the income effect is dominant. Under conditions of uncertainty an increase in nonwage income will tend to encourage the choice of risky high-paying work activities if their monetary returns are uncertain. If the nonmonetary returns of an occupation are uncertain the propensity to choose it will tend to decrease with wealth. Finally, an increase in human capital is likely to discourage the choice of occupations with risky monetary returns.

JEL-codes: J45 (search for similar items in EconPapers)
Date: 1973-12
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Related works:
Journal Article: The Wealth Effect in Occupational Choice (1976)
Working Paper: The Wealth Effect in Occupational Choice (1974)
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Persistent link: https://EconPapers.repec.org/RePEc:pri:indrel:44

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