Working Paper No. 538

Redistribution, Occupational Choice and Intergenerational Mobility: Does Wage Equality Nail the Cobbler to His Last?

Published: June 6, 2000Pages: 33Keywords: Intergenerational Mobility, Occupational Choice, Allocation of Talent, RedistributionJEL-codes: J62; J68

Redistribution, Occupational Choice and Intergenerational Mobility: Does Wage Equality Nail the Cobbler to His Last? Anna Sjögren


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 effects 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.

Interdisciplinary European Studies

The European Union in a Changing World Order

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This book explores how the European Union responds to the ongoing challenges to the liberal international order. These challenges arise both within the EU itself and beyond its borders, and put into question the values of free trade and liberal democracy. 

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