Title

The Wealth Effect in Occupational Choice

Author(s)

Yoram Weiss Yoram Weiss (University of Tel Aviv, Princeton University and NBER)

Abstract

The purpose of this paper is to indicate regularities in the area of occupational choice using income-leisure analysis. A simple one-period model is used to examine the effect of changes in nonhuman and human wealth on the choice of an occupation. It is argued that under certainty: An increase in nonwage income will increase the propensity to choose pleasant low-paying work activities. An increase in human capital will also induce a choice of pleasant work activities if the income effect is dominant. Under conditions of uncertainty an increase in nonwage income will tend to encourage the choice of risky high-paying work activities if their monetary returns are uncertain. If the nonmonetary returns of an occupation are uncertain the propensity to choose it will tend to decrease with wealth. Finally, an increase in human capital is likely to discourage the choice of occupations with risky monetary returns.

Creation Date

1973-12

Section URL ID

IRS

Paper Number

44

URL

https://dataspace.princeton.edu/bitstream/88435/dsp017d278t03n/1/44.pdf

File Function

Jel

J45

Keyword(s)

Suppress

false

Series

1