Knocking on parents’ doors: regulation and intergenerational mobility

Publication type

Research Paper

Series Number

1182

Series

Bank of Italy Working Papers

Authors

Publication date

July 15, 2018

Summary:

We exploited two major reforms in the regulation of professional services implemented in Italy since the 2000s in order to examine the impact on the intergenerational transmission of occupations. We built an OECD-style indicator of strictness of regulation for 14
occupations and three different cohorts (i.e. before and after each reform). Then, using a difference-in-differences strategy, we exploited the differential effect of regulation on the occupations considered compared with employees in similar occupations, before and after
each reform. We found that the progressive liberalization of professional services affected the allocation of individuals across occupations, leading to a substantial decrease in the propensity to follow the same career as one’s parents. The impact of regulation on the likelihood of being employed in the same occupation as one’s parents is greater in soft sciences and in areas where the demand for professional services is higher; at individual level, it is greater for less able individuals.

Subject

Link

http://www.bancaditalia.it/pubblicazioni/temi-discussione/2018/2018-1182/en_tema_1182.pdf

Notes

Is referenced in: Bank of Italy (2018) 'Annual Report'. Rome: Bank of Italy. https://www.bancaditalia.it/pubblicazioni/relazione-annuale/2017/rel_2017.pdf

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