JESS Seminar: Knocking on parents’ door: Regulation and intergenerational mobility

We exploit two main reforms in the regulation of professional services occurred in Italy since the 2000s to examine the impact on intergenerational transmission of occupation. We build an OECD-style index of strictness of regulation for 14 occupations and for three different cohorts (i.e. before and after each reform). Then, using a difference- in-differences strategy, we exploit the differential effect of regulation on treated occupations compared to employees in similar occupations, before and after each reform. We find that the progressive liberalization of the professional services affects the allocation of individuals across occupations, leading to a substantial decrease in the propensity of career following. The impact of regulation on occupational persistence is stronger for occupations in soft sciences and in areas where the demand of professional services is higher; at the individual level, it is stronger for less able individuals.