Redistribution, Occupational Choice and Intergenerational Mobility: Does wage equality nail the cobbler to his last?¤
نویسنده
چکیده
The classical Roy-model of selection on the labor market is extended in order to analyze intergenerational mobility. This is done by linking ability uncertainty to family background. I derive implications for the allocation of talent and for background dependent earnings patterns within occupations and show that a very compressed wage structure can cause negative sorting of people with family background in the occupation with low returns to ability. I also study the e¤ects of income redistribution on mobility and talent allocation. It is found that a redistributive welfare system either reduces vertical mobility or enhances it at the cost of a shrinking proportion of people choosing the occupation with high returns.
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