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Choosing the Right Pond: Social Approval and Occupational Choice

  • Anandi Mani

    (Williams College)

  • Charles H. Mullin

    (Bates White)

Registered author(s):

    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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    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
    Contact details of provider: Web page: http://www.journals.uchicago.edu/JOLE/

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    1. Sendhil Mullainathan & Marianne Bertrand & Erzo F.P. Luttmer, 1998. "Network Effects and Welfare Cultures," Working papers 98-21, Massachusetts Institute of Technology (MIT), Department of Economics.
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    4. Fershtman, C. & Weiss, Y., 1991. "Social Status , Culture and Economic Performance," Papers 32-91, Tel Aviv.
    5. George A. Akerlof, 1997. "Social Distance and Social Decisions," Econometrica, Econometric Society, vol. 65(5), pages 1005-1028, September.
    6. Oded Galor & Joseph Zeira, 2013. "Income Distribution and Macroeconomics," Working Papers 2013-12, Brown University, Department of Economics.
    7. Jovanovic, Boyan, 1982. "Favorable Selection with Asymmetric Information," The Quarterly Journal of Economics, MIT Press, vol. 97(3), pages 535-39, August.
    8. Heckman, James J & Honore, Bo E, 1990. "The Empirical Content of the Roy Model," Econometrica, Econometric Society, vol. 58(5), pages 1121-49, September.
    9. Bernheim, B Douglas, 1994. "A Theory of Conformity," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 841-77, October.
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