Intergenerational Occupational Mobility in a Rural Economy by M. Shahe Emran and Forhad Shilpi :: NEUDC 2007 Papers :: Northeast Universities Development Consortium Conference :: Center for International Development at Harvard University (CID)

This paper presents evidence on intergenerational occupational mobility from agriculture to the nonfarm sector using survey data from Nepal. In the absence of credible instruments, the degree of selection on observables is used as a guide to the degree of selection on unobservables á la Altonji et. al. (2005) to address the unobserved genetic correlations relevant for occupation choice. The results show that a moderate ability correlation can easily explain away the observed partial correlation in non-farm participation between the father and a son. In contrast, the partial correlation in occupation choice between mother and daughter is much stronger, and is unlikely to be driven by genetic correlations alone. The results suggest that mother’s nonfarm participation plays a causal role in daughter’s choice of nonfarm occupation, possibly because of “cultural inheritance” through role model and learning effects, and transfer of reputation and social capital.