Like Father, Like Son: Occupational Choice, Intergenerational Persistence and Misallocation

The Institute of Economics will hold a seminar meeting as part of its Seminar Series on Tuesday, February 28, 2023: Iacopo Morchio from University of Bristol (United Kingdom) will present the paper "Like Father, Like Son: Occupational Choice, Intergenerational Persistence and Misallocation (joint with Salvatore Lo Bello)”.

Abstract

We develop a dynamic quantitative model of occupational choice and search frictions with multiple channels of intergenerational transmission (comparative advantage, social contacts and preferences), and use it to decompose the occupational persistence observed in the UK. In the model, workers who choose their father’s occupation find jobs faster and earn lower wages, which is consistent with patterns found in UK data. Quantitatively, parental networks account for 78% of total persistence. Shutting down parental networks or the transmission of preferences improves the allocation of workers and thus yields welfare gains, while removing the transmission of comparative advantage generates welfare losses.

The seminar will be held in blended mode. In person participation is possible in Aula EMbeDS (Via Maffi) and available seats are allocated on a first come first served basis. For online participation please use the following link.