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Choosing the Right Pond: Social Approval and Occupational Choice

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  • Anandi Mani

    (Williams College)

  • Charles H. Mullin

    (Bates White)

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    Abstract

    We model the endogenous emergence of social perceptions about occupations and their impact on occupational choice. In particular, an individual's social approval increases with his community's perception of his skill in his chosen career. These perceptions vary across communities because individuals better assess the skill of those in occupations similar to their own. Such imperfect assessment can distort choices away from comparative advantage. When skill distributions differ across occupations and/or correlate positively, the community perceives one occupation more favorably. This favored sector experiences overcrowding, but misallocation occurs across both sectors. Furthermore, a positive skill correlation can produce multiple steady states.

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    Bibliographic Info

    Article provided by University of Chicago Press in its journal Journal of Labor Economics.

    Volume (Year): 22 (2004)
    Issue (Month): 4 (October)
    Pages: 835-862

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    Handle: RePEc:ucp:jlabec:v:22:y:2004:i:4:p:835-862

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    Web page: http://www.journals.uchicago.edu/JOLE/

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    1. Marianne Bertrand & Erzo F. P. Luttmer & Sendhil Mullainathan, 2000. "Network Effects And Welfare Cultures," The Quarterly Journal of Economics, MIT Press, vol. 115(3), pages 1019-1055, August.
    2. Bisin, Alberto & Verdier, Thierry, 1998. "On the cultural transmission of preferences for social status," Journal of Public Economics, Elsevier, vol. 70(1), pages 75-97, October.
    3. Bernheim, B Douglas, 1994. "A Theory of Conformity," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 841-77, October.
    4. Jovanovic, Boyan, 1982. "Favorable Selection with Asymmetric Information," The Quarterly Journal of Economics, MIT Press, vol. 97(3), pages 535-39, August.
    5. Galor, Oded & Zeira, Joseph, 1993. "Income Distribution and Macroeconomics," Review of Economic Studies, Wiley Blackwell, vol. 60(1), pages 35-52, January.
    6. George A. Akerlof, 1997. "Social Distance and Social Decisions," Econometrica, Econometric Society, vol. 65(5), pages 1005-1028, September.
    7. Fershtman, C. & Weiss, Y., 1991. "Social Status , Culture and Economic Performance," Papers 32-91, Tel Aviv.
    8. George J. Borjas, 1994. "Ethnicity, Neighborhoods, and Human Capital Externalities," NBER Working Papers 4912, National Bureau of Economic Research, Inc.
    9. Heckman, James J & Honore, Bo E, 1990. "The Empirical Content of the Roy Model," Econometrica, Econometric Society, vol. 58(5), pages 1121-49, September.
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    Cited by:
    1. Tacsir, Ezequiel, 2009. "Elección de ocupación: factores personales y aspectos sociales
      [Occupation Choice: Personal factors and Social Aspects]
      ," MPRA Paper 20432, University Library of Munich, Germany.
    2. Holger Strulik, 2013. "School Attendance And Child Labor—A Model Of Collective Behavior," Journal of the European Economic Association, European Economic Association, vol. 11(2), pages 246-277, 04.
    3. Holger Strulik, 2012. "Riding High: Success in Sports and the Rise of Doping Cultures," Scandinavian Journal of Economics, Wiley Blackwell, vol. 114(2), pages 539-574, 06.
    4. Strulik, Holger, 2012. "A Mass Phenomenon: The Social Evolution of Obesity," Hannover Economic Papers (HEP) dp-489, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    5. Tacsir, Ezequiel, 2010. "Occupation Choice: Family, Social and Market Influences," MERIT Working Papers 013, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    6. Strulik, Holger, 2008. "The Role of Poverty and Community Norms in Child Labor and Schooling Decisions," Proceedings of the German Development Economics Conference, Zurich 2008 42, Verein für Socialpolitik, Research Committee Development Economics.

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