The classical Roy-model of selection on the labor market is extended in order to analyze intergenerational mobility. This is done by linking ability uncertainty to family background. I derive implications for the allocation of talent and for background dependent earnings patterns within occupations and show that a very compressed wage structure can cause negative sorting of people with family background in the occupation with low returns to ability. I also study the effects of income redistribution on mobility and talent allocation. It is found that a redistributive welfare system either reduces vertical mobility or enhances it at the cost of a shrinking proportion of people choosing the occupation with high returns.
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Length: 33 pages Date of creation: 2000 Date of revision: Handle: RePEc:fth:iniesr:538
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Find related papers by JEL classification: J62 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Job, Occupational and Intergenerational Mobility; Promotion J68 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Public Policy
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Gary S. Becker & Nigel Tomes, 1994.
"X. Human Capital and the Rise and Fall of Families,"
NBER Chapters,
in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education (3rd Edition), pages 257-298
National Bureau of Economic Research, Inc.
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