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Skills, Aspirations, and Occupations

Author

Listed:
  • Alexis Orellana

    (Northwestern University)

  • Kegon Teng Kok Tan

    (University of Rochester)

Abstract

It is well documented that children often "inherit" the occupations of their parents. This paper studies the role of early occupational aspirations in determining later life outcomes, a potentially important channel for intergenerational correlations in occupations. Using the Wisconsin Longitudinal Study, we estimate a lifecycle model of college choice and occupation choice to quantify the effect of aspirations on education and wages. We find that aspirations have a sizeable impact on educational attainment and wages, even conditional on latent skills that we recover from the choice model. We also simulate the importance of family background conditional on skills through the strong correlation between family background and aspirations. Our findings suggest that aspirations may be a valuable lever for reducing intergenerational inequality.

Suggested Citation

  • Alexis Orellana & Kegon Teng Kok Tan, 2023. "Skills, Aspirations, and Occupations," Working Papers 2023-027, Human Capital and Economic Opportunity Working Group.
    • Handle: RePEc:hka:wpaper:2023-027
    Note: MIP
    as

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    File URL: http://humcap.uchicago.edu/RePEc/hka/wpaper/Orellana_Tan_2023_skills-aspirations-occupations.pdf
    File Function: First version, October 15, 2023
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    References listed on IDEAS

    as
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    4. Nina Guyon & Elise Huillery, 2021. "Biased Aspirations and Social Inequality at School: Evidence from French Teenagers," The Economic Journal, Royal Economic Society, vol. 131(634), pages 745-796.
    5. Carl Sanders & Christopher Taber, 2012. "Life-Cycle Wage Growth and Heterogeneous Human Capital," Annual Review of Economics, Annual Reviews, vol. 4(1), pages 399-425, July.
    6. Keane, Michael P & Wolpin, Kenneth I, 1997. "The Career Decisions of Young Men," Journal of Political Economy, University of Chicago Press, vol. 105(3), pages 473-522, June.
    7. David Deming & Lisa B. Kahn, 2018. "Skill Requirements across Firms and Labor Markets: Evidence from Job Postings for Professionals," Journal of Labor Economics, University of Chicago Press, vol. 36(S1), pages 337-369.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    college choice; occupations; lifecycle wage growth; aspirations;
    All these keywords.

    JEL classification:

    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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