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Occupational Choice and the Spirit of Capitalism

Listed author(s):
  • Matthias Doepke
  • Fabrizio Zilibotti

The British Industrial Revolution triggered a reversal in the social order of society 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 frugal middle class and an upper class imbued with disdain for work. We propose an economic theory of preference formation where 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. 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 ethics, 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.

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File URL: http://www.nber.org/papers/w12917.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 12917.

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Date of creation: Feb 2007
Publication status: published as Matthias Doepke & Fabrizio Zilibotti, 2008. "Occupational Choice and the Spirit of Capitalism," The Quarterly Journal of Economics, MIT Press, vol. 123(2), pages 747-793, 05.
Handle: RePEc:nbr:nberwo:12917
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