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Occupational Choice and the Spirit of Capitalism

  • Matthias Doepke

The British Industrial Revolution triggered a socioeconomic transformation whereby the landowning aristocracy was replaced by industrial capitalists rising from the middle classes as the economically dominant group. We propose a theory of preference formation under financial market imperfections that can account for this pattern. Parents shape their children's preferences in response to economic incentives. Middle-class families in occupations requiring effort, skill, and experience develop patience and a 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 preindustrial professions, become key determinants of success once industrialization transforms the economic landscape. (c) 2008 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology..

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Paper provided by UCLA Department of Economics in its series UCLA Economics Online Papers with number 419.

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Handle: RePEc:cla:uclaol:419
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