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Patience Capital and the Demise of the Aristocracy

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Author Info
Doepke, Matthias () (University of California, Los Angeles)
Zilibotti, Fabrizio () (Institute for International Economic Studies, Stockholm University)

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Abstract

We model the decision problem of a parent who chooses an occupation and invests in the patience of her children. The two choices complement each other: patient individuals choose occupations with a steep income profile; a steep income profile, in turn, leads to a strong incentive to invest in patience. In equilibrium, society becomes stratified along occupational lines. The most patient people are those in occupations requiring the most education and experience. The theory can account for the demise of the British land-owning aristocracy in the nineteenth century, when rich landowners proved unable to profit from new opportunities arising with industrialization, and were thus surpassed by industrialists rising from the middle classes.

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Publisher Info
Paper provided by Stockholm University, Institute for International Economic Studies in its series Seminar Papers with number 735.

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Length: 67 pages
Date of creation: 01 Apr 2005
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Handle: RePEc:hhs:iiessp:0735

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Related research
Keywords: discount factor; patience; British aristocracy; Industrial Revolution; capital accumulation; income distribution;

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Find related papers by JEL classification:
N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913
O14 - Economic Development, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
Z10 - Other Special Topics - - Cultural Economics - - - General

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Cited by:
(explanations, 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.)

  1. Tabellini, Guido, 2007. "The Scope of Cooperation: Values and incentives," CEPR Discussion Papers 6534, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  2. Guido Tabellini, 2007. "The Scope of Cooperation: Norms and Incentives," Levine's Working Paper Archive 321307000000000866, David K. Levine. [Downloadable!]
  3. Doepke, Matthias & Zilibotti, Fabrizio, 2007. "Occupational Choice and the Spirit of Capitalism," CEPR Discussion Papers 6405, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  4. Lagerlöf, Nils-Petter & Tangerås, Thomas, 2005. "Human Capital, Rent Seeking, and a Transition from Stagnation to Growth," Working Paper Series 656, Research Institute of Industrial Economics. [Downloadable!]
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