Resumen de Essays on occupational choice, intergenerational persistence and structural change
In the first chapter, “Parental Links and Employment Prospects: Evidence from the UK ” (joint with Iacopo Morchio), I study how parental links affect labor market choices and employment prospects of individuals, exploiting monthly job histories from the British Household Panel Survey (BHPS, hereafter). I document two important facts: i) occupational choice is correlated across generations; and ii) the offspring’s job–finding probability is correlated to the father’s employment, especially for those who find a job in their father’s oc- cupation. More specifically, I document that a son is between 26 and 167 % (depending on the occupation) more likely to be in his father’s occupation. Similar considerations apply to daughters and mothers, with an excess probability ranging between 17 and 626%. I also claim that using contemporaneous information is crucial for measuring occupational persistence, as one would get substantially different patterns of persistence using retrospective information. Moreover, we look at the employment prospects of offspring conditional on the employment status of parents and on whether or not they are in the same occupation. First of all, I document large gradients in employment prospects both by the parental employment status (both for fathers and mothers) and by a dummy capturing occupational persistence. These gradients are apparent especially for younger workers and then steadily fade out over the life–cycle. Second, I run linear regressions to establish the extent to which these correlations are explained by observable characteristics. I find that, ceteris paribus, having an employed (rather than unemployed) father increases the employment rate by about 8 p.p. and the monthly job–finding rate by at least 50% (5–6 p.p.), whereas this does not hold for mothers. Furthermore, these correlations are much larger for younger workers and for those who find an occupation in their father’s occupation. In contrast, I do not find any statistically significant difference in job separation rates. Impor- tantly, my findings survive the inclusion on individual fixed effects in the regression model. One potential explanation for these findings is that parental networks are an important source of information about job va- cancies for workers. To illustrate this mechanism, I develop a stylized model of intergenerational transmission of networks in which agents with little or no experience in the labor market rely more heavily on parental connections. This implies that the employment status of the offspring and the parent are correlated -via an higher job–finding rate- especially at the beginning of the offspring’s career, rather than later on. Finally, a number of robustness checks also suggest that the correlations that I find are indeed due to informational advantages rather then human capital transmission, direct hiring or common shocks. Overall, my findings relate to the literature on networks in the labor market and to the intergenerational literature. In particular, they suggest that parental networks transmission may be a potentially important source of occupational per- sistence across generations.
In the second chapter, “Like Father, Like Son: Occupational Choice, Intergenerational Persistence and Misal- location ” (joint with Iacopo Morchio), I study the determinants of occupational persistence across generations.
The key contribution is to develop a framework with multiple sources of persistence and quantitatively assess their relative importance, in order to shed light on the relationship between persistence and misallocation. I start by developing a simple model of occupational choice and intergenerational transmission of productive abilities (comparative advantage) and social contacts. In the model, some workers face a tradeoff between choosing the occupation in which they are most productive (higher wages) and the one in which they can exploit their father’s network (higher job–finding rates). This implies that in equilibrium some workers will decide not to pursue their comparative advantage, generating productive mismatch in the economy, and thus producing negative externalities on firm entry. I show that persistence can indeed be a sign of misallocation if parents help their offspring nd a job faster in their current occupation, which is not necessarily where their offsprings comparative advantage lies. In our model, workers optimally choose their occupation, so that mismatch is not always detrimental to welfare. However, we nd the equilibrium to generally be inefficient, as workers do not internalize that: i) search frictions interact with the level of mismatch present in the economy, and rms offer fewer jobs if they expect workers to be more mismatched and consequently less productive; and ii) mismatch has dynamic effects, via intergenerational transmission. I also analytically establish that higher
