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Occupational Choice and the Spirit of Capitalism


Doepke, Matthias; Zilibotti, Fabrizio (2007). Occupational Choice and the Spirit of Capitalism. Working paper series / Institute for Empirical Research in Economics No. 326, University of Zurich.

Abstract

The British Industrial Revolution triggered a reversal in the social order of society whereby the landed elite was replaced by industrial capitalists rising from thenmiddle classes as the economically dominant group. Many observers have linkednthis transformation to the contrast in values between a hard-working and frugal middle class and an upper class imbued with disdain for work. We propose an economic theory of preference formation where both the divergence of attitudesnacross social classes and the ensuing reversal of economic fortunes are equilibriumnoutcomes. In our theory, parents shape their children's preferences in response toneconomic incentives. If financial markets are imperfect, this results in the stratification of society along occupational lines. Middle-class families in occupationsnthat require effort, skill, and experience develop patience and work ethic, whereas upper-class families relying on rental income cultivate a refined taste for leisure. These class-specific attitudes, which are rooted in the nature of pre-industrial professions, become key determinants of success once industrialization transforms the economic landscape.

Abstract

The British Industrial Revolution triggered a reversal in the social order of society whereby the landed elite was replaced by industrial capitalists rising from thenmiddle classes as the economically dominant group. Many observers have linkednthis transformation to the contrast in values between a hard-working and frugal middle class and an upper class imbued with disdain for work. We propose an economic theory of preference formation where both the divergence of attitudesnacross social classes and the ensuing reversal of economic fortunes are equilibriumnoutcomes. In our theory, parents shape their children's preferences in response toneconomic incentives. If financial markets are imperfect, this results in the stratification of society along occupational lines. Middle-class families in occupationsnthat require effort, skill, and experience develop patience and work ethic, whereas upper-class families relying on rental income cultivate a refined taste for leisure. These class-specific attitudes, which are rooted in the nature of pre-industrial professions, become key determinants of success once industrialization transforms the economic landscape.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Working Paper Series > Institute for Empirical Research in Economics (former)
Dewey Decimal Classification:330 Economics
Language:English
Date:June 2007
Deposited On:29 Nov 2011 22:47
Last Modified:12 Aug 2017 13:03
Series Name:Working paper series / Institute for Empirical Research in Economics
ISSN:1424-0459
Official URL:http://www.econ.uzh.ch/wp.html

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