A Theoretical and Empirical Study of Occupational Choice under Uncertainty
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The Department of Economic Science was founded in 1898 to teach economic theory as a truth of industrial life, and was very much concerned with applying economics to business and industry, particularly agriculture. Between 1910 and 1967 it showed the growing influence of other social studies, such as sociology, history, and political science. Today it encompasses the majors of Agricultural Business (preparing for agricultural finance and management), Business Economics, and Economics (for advanced studies in business or economics or for careers in financing, management, insurance, etc).
History
The Department of Economic Science was founded in 1898 under the Division of Industrial Science (later College of Liberal Arts and Sciences); it became co-directed by the Division of Agriculture in 1919. In 1910 it became the Department of Economics and Political Science. In 1913 it became the Department of Applied Economics and Social Science; in 1924 it became the Department of Economics, History, and Sociology; in 1931 it became the Department of Economics and Sociology. In 1967 it became the Department of Economics, and in 2007 it became co-directed by the Colleges of Agriculture and Life Sciences, Liberal Arts and Sciences, and Business.
Dates of Existence
1898–present
Historical Names
- Department of Economic Science (1898–1910)
- Department of Economics and Political Science (1910-1913)
- Department of Applied Economics and Social Science (1913–1924)
- Department of Economics, History and Sociology (1924–1931)
- Department of Economics and Sociology (1931–1967)
Related Units
- College of Agricultural and Life Sciences (parent college)
- College of Liberal Arts and Sciences (parent college)
- College of Business (parent college)
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Abstract
This paper will present a model of occupational choice in which the agents are uncertain about their wage within the occupation. Agents are assumed to know their own stock of human capital and the distribution of wages per unit of human capital in the occupation at the time of initial labor market entry. The agents decide which occupation to select based on their expected utility from each occupation, given the tastes for future consumption, the available stock of human capital, the tastes for the occupation, the costs of entry into the occupation, the assets available for consumption, the tastes for risk, and the distribution of wages within each occupation. By specifying the form of the utility function, we can derive estimable equations relating the probability of choosing an occupation, i, to the moments of the distribution of wages and the past accumulations of human capital. By imposing appropriate restrictions on the parameters of the model, both within equations and across equations, all the parameters of the structural model underlying the occupational choice may be derived.