A model of occupational choice and human capital investment is developed and tested. The model allows family background to influence occupational choice via access to economic resources, differences in costs of schooling, and ability uncertainty. The model predicts that people are more sensitive...

The classical Roy-model of selection on the labor market is extended in order to analyze intergenerational mobility. This is done by linking ability uncertainty to family background. I derive implications for the allocation of talent and for background dependent earnings patterns within...

Using results on brother correlations of different groups of second generation immigrants based on administrative data from Denmark, this note analyzes the role of cultural background in the determination of the level of intergenerational mobility. The estimated correlations indicate that...

This paper is the first to analyze intergenerational economic mobility based on sibling correlations in permanent earnings in Germany and to provide a cross-country comparison of Germany, Denmark, and the US. The main findings are as follows: the importance of family and community background in...

Does tax policy affect the rate of self-employment in a modern welfare state? This question is analyzed empirically based on Swedish data for the entire post-war period. Available tax data indicate that payroll taxes have had a negative influence on the unincorporated rate of self-employment,...

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This paper includes theoretical and empirical analyses of some effects of changes in payroll taxes. First, the implication of the standard partial equilibrium analysis is explored in Section II. In particular, the relationship between statutory and economic incidence are clarified and the...