Publications and Research
Document Type
Working Paper
Publication Date
2024
Abstract
This paper investigates how intergenerational occupational mobility and self-selection into occupations are influenced by the occupations of parents. The results demonstrate that children who pursue their parents’ occupations, particularly those in the lowest earnings percentiles, are more negatively self-selected compared to those whose parents are in the highest earning deciles. In particular, 65% of the children who pursue their parents’ occupation in Decile 1, 49% in Decile 2, 32% in Decile 3 and 26% in Decile 4 would have achieved higher productivity and earned higher earnings in high-income occupations (specifically in Decile 10 occupations). In contrast, children from high-income backgrounds (Decile 9,10) would not have been more productive and earned more in low-income occupations, indicating a relatively efficient allocation of talent within high-income families. This suggests that negative self-selection in occupational choice is more prevalent among middle- and low-income children. These findings underscore the significant impact of occupational inheritance in perpetuating income inequality and highlight the influence of parental background on shaping an individual’s potential within specific job markets.
