Alexis Orellana
Kegon Teng Kok Tan

It is well documented that children often "inherit" the occupations of their parents. This paper studies the role of early occupational aspirations in determining later life outcomes, a potentially important channel for intergenerational correlations in occupations. Using the Wisconsin Longitudinal Study, we estimate a lifecycle model of college choice and occupation choice to quantify the effect of aspirations on education and wages. We find that aspirations have a sizeable impact on educational attainment and wages, even conditional on latent skills that we recover from the choice model. We also simulate the importance of family background conditional on skills through the strong correlation between family background and aspirations. Our findings suggest that aspirations may be a valuable lever for reducing intergenerational inequality.

Publication Type
Working Paper
File Description
First version, October 15, 2023
JEL Codes
I24: Education and Inequality
J24: Human Capital; Skills; Occupational Choice; Labor Productivity
college choice
lifecycle wage growth