Events at CERGE-EI

Friday, 14 April, 2023 | 14:45 | Micro Theory Research Seminar

Pawel Gola (University of Edinburgh) "On the Importance of Social Status for Occupational Sorting"

Pawel Gola, Ph.D.

University of Edinburgh, United Kingdom

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Abstract: Models of self-selection predict that occupations with flat wage schedules attract workers of low average skill. Yet, in academia wages are flat but the average skill level is high. In this paper, I examine whether social status concerns can explain this puzzle. I find that within-occupation status can ensure that academia attracts mainly high-skilled workers, but only at the cost of attracting few workers overall. If, however, workers care both about within- and between-occupation status, then academia can be arbitrarily large and attract workers of high average skill. I conclude that within- and between-occupation status concerns act as complements.

JEL Classification: D91, J24
Keywords: occupational sorting, self-selection, social status, occupational prestige, relative concerns

Full Text: On the Importance of Social Status for Occupational Sorting