Advanced Search
MyIDEAS: Login to save this paper or follow this series

Occupational Choice and the Spirit of Capitalism

Contents:

Author Info

  • Doepke, Matthias

    ()
    (Northwestern University)

  • Zilibotti, Fabrizio

    ()
    (University of Zurich)

Abstract

The British Industrial Revolution triggered a reversal in the social order whereby the landed elite was replaced by industrial capitalists rising from the middle classes as the economically dominant group. Many observers have linked this transformation to the contrast in values between a hard-working and thrifty middle class and an upper class imbued with disdain for work. We propose an economic theory of preference formation in which both the divergence of attitudes across social classes and the ensuing reversal of economic fortunes are equilibrium outcomes. In our theory, parents shape their children’s preferences in response to economic incentives. If financial markets are imperfect, this results in the stratification of society along occupational lines. Middle-class families in occupations that require effort, skill, and experience develop patience and work ethic, whereas upper-class families relying on rental income cultivate a refined taste for leisure. These class-specific attitudes, which are rooted in the nature of pre-industrial professions, become key determinants of success once industrialization transforms the economic landscape.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://ftp.iza.org/dp2949.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2949.

as in new window
Length: 57 pages
Date of creation: Jul 2007
Date of revision:
Publication status: published in: Quarterly Journal of Economics, 2008, 123 (2), 747-793
Handle: RePEc:iza:izadps:dp2949

Contact details of provider:
Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org

Order Information:
Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Email:

Related research

Keywords: social classes; endogenous preferences; occupational choice; industrial revolution;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

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.:
as in new window
  1. James J. Heckman & Jora Stixrud & Sergio Urzua, 2006. "The Effects of Cognitive and Noncognitive Abilities on Labor Market Outcomes and Social Behavior," NBER Working Papers 12006, National Bureau of Economic Research, Inc.
  2. Assar Lindbeck & Sten Nyberg, 2001. "Raising Children to Work Hard: Altruism, Work Norms and Social Insurance," CESifo Working Paper Series 498, CESifo Group Munich.
  3. Oded Galor & Joseph Zeira, 2013. "Income Distribution and Macroeconomics," Working Papers 2013-12, Brown University, Department of Economics.
  4. Glenn Harrison & Morten Lau & Elisabet Rutstrom & Melonie Williams, 2002. "Estimating individual discount rates in denmark: A field experiment," Artefactual Field Experiments, The Field Experiments Website 00062, The Field Experiments Website.
  5. Dohmen, Thomas & Falk, Armin & Huffman, David B. & Sunde, Uwe, 2006. "The Intergenerational Transmission of Risk and Trust Attitudes," IZA Discussion Papers 2380, Institute for the Study of Labor (IZA).
  6. Bisin, A. & Verdier, T., 1999. "Beyond the Melting Pot : Cultural Transmission, Marriage, and the Evolution of Ethnic and Religious Traits," DELTA Working Papers, DELTA (Ecole normale supérieure) 1999-10, DELTA (Ecole normale supérieure).
  7. Carneiro, Pedro & Heckman, James J., 2003. "Human Capital Policy," IZA Discussion Papers 821, Institute for the Study of Labor (IZA).
  8. Botticini, Maristella & Eckstein, Zvi, 2005. "Jewish Occupational Selection: Education, Restrictions, or Minorities?," The Journal of Economic History, Cambridge University Press, Cambridge University Press, vol. 65(04), pages 922-948, December.
  9. McCleary, Rachel & Barro, Robert, 2003. "Religion and Economic Growth across Countries," Scholarly Articles 3708464, Harvard University Department of Economics.
  10. D. C. Moore, 1965. "The Corn Laws and High Farming," Economic History Review, Economic History Society, Economic History Society, vol. 18(3), pages 544-561, December.
  11. Oded Galor & Omer Moav, 2002. "Natural Selection And The Origin Of Economic Growth," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 117(4), pages 1133-1191, November.
  12. Hauk, Esther & Sáez-Martí, María, 2001. "On the Cultural Transmission of Corruption," Working Paper Series, Research Institute of Industrial Economics 564, Research Institute of Industrial Economics.
  13. Munro, John H., 2004. "Builders’ wages in southern England and the southern Low Countries, 1346 -1500: a comparative study of trends in and levels of real incomes," MPRA Paper 11209, University Library of Munich, Germany, revised Jul 2004.
  14. Croix, David de la & Michel, Philippe, 1999. "Optimal growth when tastes are inherited," Journal of Economic Dynamics and Control, Elsevier, Elsevier, vol. 23(4), pages 519-537, February.
  15. John List & David Reiley, 2008. "Field experiments," Artefactual Field Experiments, The Field Experiments Website 00091, The Field Experiments Website.
  16. Lionel Artige & Carmen Camacho & David De La Croix, 2004. "Wealth Breeds Decline: Reversals of Leadership and Consumption Habits," Journal of Economic Growth, Springer, Springer, vol. 9(4), pages 423-449, December.
  17. Chris Carroll & Lawrence H. Summers, 1989. "Consumption Growth Parallels Income Growth: Some New Evidence," NBER Working Papers 3090, National Bureau of Economic Research, Inc.
  18. Becker, Gary S & Mulligan, Casey B, 1997. "The Endogenous Determination of Time Preference," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 112(3), pages 729-58, August.
  19. James Heckman, 2011. "Policies to foster human capital," Educational Studies, Higher School of Economics, Higher School of Economics, issue 3, pages 73-137.
  20. John Ameriks & Andrew Caplin & John Leahy, 2002. "Wealth Accumulation and the Propensity to Plan," NBER Working Papers 8920, National Bureau of Economic Research, Inc.
  21. Sascha O. Becker & Ludger Woessmann, 2007. "Was Weber Wrong? A Human Capital Theory of Protestant Economic History," CESifo Working Paper Series 1987, CESifo Group Munich.
  22. Tom Nicholas, 1999. "Businessmen and land ownership in the late nineteenth century," Economic History Review, Economic History Society, Economic History Society, vol. 52(1), pages 27-44, 02.
  23. Pierre-Olivier Gourinchas & Jonathan A. Parker, 2002. "Consumption Over the Life Cycle," Econometrica, Econometric Society, Econometric Society, vol. 70(1), pages 47-89, January.
  24. Doepke, Matthias & Zilibotti, Fabrizio, 2005. "Patience Capital and the Demise of the Aristocracy," Seminar Papers, Stockholm University, Institute for International Economic Studies 735, Stockholm University, Institute for International Economic Studies.
  25. Gary D. Hansen & Edward C. Prescott, 1999. "Malthus to Solow," Staff Report, Federal Reserve Bank of Minneapolis 257, Federal Reserve Bank of Minneapolis.
  26. Matthias Doepke, 2004. "Accounting for Fertility Decline During the Transition to Growth," Journal of Economic Growth, Springer, Springer, vol. 9(3), pages 347-383, 09.
  27. John M. Barron & Mark C. Berger & Dan A. Black, 2006. "Selective Counteroffers," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 24(3), pages 385-410, July.
  28. Guiso, Luigi & Sapienza, Paola & Zingales, Luigi, 2003. "People's opium? Religion and economic attitudes," Journal of Monetary Economics, Elsevier, Elsevier, vol. 50(1), pages 225-282, January.
  29. Mariacristina De Nardi, 2002. "Wealth inequality and intergenerational links," Staff Report, Federal Reserve Bank of Minneapolis 314, Federal Reserve Bank of Minneapolis.
  30. Peter Temin & Hans-Joachim Voth, 2008. "Interest Rate Restrictions in a Natural Experiment: Loan Allocation and the Change in the Usury Laws in 1714," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 118(528), pages 743-758, 04.
  31. Clark, Gregory & Hamilton, Gillian, 2006. "Survival of the Richest: The Malthusian Mechanism in Pre-Industrial England," The Journal of Economic History, Cambridge University Press, Cambridge University Press, vol. 66(03), pages 707-736, September.
  32. Maria Sáez-Martí & Yves Zenou, 2007. "Cultural transmission and discrimination," IEW - Working Papers, Institute for Empirical Research in Economics - University of Zurich 348, Institute for Empirical Research in Economics - University of Zurich, revised Apr 2012.
  33. Francesco Caselli & Nicola Gennaioli, 2006. "Dynastic management," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 3558, London School of Economics and Political Science, LSE Library.
  34. Douglas Holtz-Eakin & David Joulfaian & Harvey S. Rosen, 1992. "The Carnegie Conjecture: Some Empirical Evidence," NBER Working Papers 4118, National Bureau of Economic Research, Inc.
  35. Oded Galor, 2006. "The Demographic Transition," Working Papers 2006-24, Brown University, Department of Economics.
  36. Martin Browning & Lars Peter Hansen & James J. Heckman, 1999. "Micro Data and General Equilibrium Models," Discussion Papers 99-10, University of Copenhagen. Department of Economics.
  37. Christopher D Carroll, 2000. "Portfolios of the Rich," Economics Working Paper Archive, The Johns Hopkins University,Department of Economics 430, The Johns Hopkins University,Department of Economics.
  38. Robert J. Barro & Rachel McCleary, 2003. "Religion and Economic Growth," NBER Working Papers 9682, National Bureau of Economic Research, Inc.
  39. Krusell, P & Smith Jr, A-A, 1995. "Income and Wealth Heterogeneity in the Macroeconomic," RCER Working Papers 399, University of Rochester - Center for Economic Research (RCER).
  40. Peter Temin & Joachim Voth, 2005. "Private borrowing during the financial revolution: Hoare’s Bank and its customers, 1702-1724," Economics Working Papers, Department of Economics and Business, Universitat Pompeu Fabra 860, Department of Economics and Business, Universitat Pompeu Fabra.
  41. Andrew A. Samwick, 1997. "Discount Rate Heterogeneity and Social Security Reform," NBER Working Papers 6219, National Bureau of Economic Research, Inc.
  42. David Card & Raj Chetty & Andrea Weber, 2007. "Cash-On-Hand and Competing Models of Intertemporal Behavior: New Evidence from the Labor Market," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 122(4), pages 1511-1560, November.
  43. Kerwin Kofi Charles & Erik Hurst, 2002. "The Correlation of Welath Across Generations," NBER Working Papers 9314, National Bureau of Economic Research, Inc.
  44. David N. Weil & Oded Galor, 2000. "Population, Technology, and Growth: From Malthusian Stagnation to the Demographic Transition and Beyond," American Economic Review, American Economic Association, American Economic Association, vol. 90(4), pages 806-828, September.
  45. Oded Galor & Stelios Michalopoulos, 2006. "Darwinian Evolution of Entrepreneurial Spirit and the Process of Development," Working Papers 2006-12, Brown University, Department of Economics.
  46. Raquel Fernández & Alessandra Fogli & Claudia Olivetti, 2004. "Mothers and Sons: Preference Formation and Female Labor Force Dynamics," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 119(4), pages 1249-1299, November.
  47. Tiago Cavalcanti & Stephen Parente & Rui Zhao, 2007. "Religion in macroeconomics: a quantitative analysis of Weber’s thesis," Economic Theory, Springer, Springer, vol. 32(1), pages 105-123, July.
  48. Abhijit V. Banerjee & Andrew F. Newman, 1990. "Occupational Choice and the Process of Development," Discussion Papers, Northwestern University, Center for Mathematical Studies in Economics and Management Science 911, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  49. Peter Temin & Hans-Joachim Voth, 0000. "The Speed of the Financial Revolution: Evidence from Hoare's Bank," Working Papers 212, Barcelona Graduate School of Economics.
  50. H. V. Bowen, 1989. "Investment and empire in the later eighteenth century: East India stockholding, 1756-1791," Economic History Review, Economic History Society, Economic History Society, vol. 42(2), pages 186-206, 05.
  51. Yona Rubinstein & James J. Heckman, 2001. "The Importance of Noncognitive Skills: Lessons from the GED Testing Program," American Economic Review, American Economic Association, American Economic Association, vol. 91(2), pages 145-149, May.
Full references (including those not matched with items on IDEAS)

Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Persistence in Economic Development
    by dvollrath in The Growth Economics Blog on 2014-05-12 16:51:12
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp2949. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.