Essays on intergenerational mobility and occupational choice

This thesis analyzes the determinants and consequences of different occupational choices, and how they relate to intergenerational dynamics and the decision to engage in self-employed work. The first chapter provides descriptive evidence on the intergenerational transmission of occupations. Using a rich set of administrative data from the Netherlands, I find that children are twice as likely to enter an occupation when it is the same as their parents’. This rate substantially increases for those above the top quartile of the parental income distribution. I observe wide heterogeneity across fields and establish the existence of a positive correlation between rates of transmission and average income in the occupation. I also uncover a gender matching pattern, with sons (daughters) following fathers (mothers) more often, even when the parental field is moderately gendered. The second chapter explores private returns from occupational persistence. It goes beyond a correlational measure and connects intergenerational occupational transmission to income mobility. To this purpose, I exploit a unique policy experiment in the context of the Netherlands to estimate children’s private gains when choosing the same profession as their parents’. Instrumental variable estimates show that “dynastic” doctors experience a 23% income boost relative to individuals who did not follow their parents. The third chapter continues the study of occupational choice in a different context, i.e. self-employment in the United Kingdom. Using the UK Labour Force Survey, as well as newly collected survey data, I document recent trends in self-employment and describe the deleterious impact that the Covid-19 crisis had on this previously growing group of workers. In this part, I uncover some of the broad heterogeneity characterising the pool of self-employed and show that it matters both for studying its recent trends and its reaction to the pandemic shock. Thanks to this novel data, I also find that four out of ten individuals currently in self-employment state a preference towards moving to a position of regular employment, if they could secure the same income level. Yet, they remain in self-employment due to lack of skills or adequate opportunities.