ERIC Number: ED117482
Record Type: RIE
Publication Date: 1973-Nov
Reference Count: 0
Occupational Choice: A Conditional Logit Model with Special Reference to Wage Subsidies and Occupational Choice. Final Report.
Boskin, Michael J.
A model of occupational choice based on the theory of human capital is developed and estimated by conditional logit analysis. The empirical results estimated the probability of individuals with certain characteristics (such as race, sex, age, and education) entering each of 11 occupational groups. The results indicate that individuals tend to choose those occupations with the highest discounted percent value of potential future earnings, the lowest present value of expected earnings foregone due to unemployment, and the lowest raining cost relative to net worth. The relative weights given to these three variables in choosing occupations varied markedly by race and sex. White males tended to weight expected earnings much more heavily relative to earnings foregone due to unemployment than black males or females of either race. Results were then employed in an analysis of the effects of a national wage subsidy scheme on the selection probabilities for each occupation. The results suggested a higher probability of entering low wage occupations due to the greater relative importance of the subsidy in these occupations. (Author/EA)
Publication Type: Reports - Research
Education Level: N/A
Sponsor: Manpower Administration (DOL), Washington, DC. Office of Research and Development.
Authoring Institution: Stanford Univ., CA. Dept. of Economics.
Note: Revised, November 1973