Abstract

Using US survey data, we construct an index across occupations that captures intrinsic non-monetary qualities relevant for worker well-being, and show that the children of richer parents are more likely to choose occupations with higher quality. We build and estimate a model of intergenerational mobility and occupational choice with preferences over occupational quality that rationalizes this fact. Using the model to adjust earnings to reflect the monetary equivalent for each worker’s occupational quality, we find substantially lower intergenerational mobility. Our model further predicts that the recent trends in the composition of labor demand in the US enhanced intergenerational mobility.

NBER Working Paper 29381

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