Abstract
The British Industrial Revolution triggered a socioeconomic transformation whereby the landowning aristocracy was replaced by industrial capitalists rising from the middle classes as the economically dominant group. We propose a theory of preference formation under financial market imperfections that can account for this pattern. Parents shape their children's preferences in response to economic incentives. Middle-class families in occupations requiring effort, skill, and experience develop patience and a work ethic, whereas upper-class families relying on rental income cultivate a refined taste for leisure. These class-specific attitudes, which are rooted in the nature of preindustrial professions, become key determinants of success once industrialization transforms the economic landscape.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 747-793 |
| Number of pages | 47 |
| Journal | Quarterly Journal of Economics |
| Volume | 123 |
| Issue number | 2 |
| DOIs | |
| State | Published - May 2008 |
Funding
* The authors would like to thank the editor, three anonymous referees, Daron Acemoglu, Philippe Aghion, Robert Barro, Michele Boldrin, Francesco Caselli, Juan-Carlos Cordoba, Nicola Gennaioli, Hartmut Lehmann, Joel Mokyr, Jean-Laurent Rosenthal, María Sáez Martí, Alan Taylor, Joachim Voth, and the audiences at many seminar and conference presentations for helpful comments and suggestions. David Lagakos and Andreas Mueller provided excellent research assistance, and Sally Gschwend provided valuable editorial comments. Financial support by the National Science Foundation (Grant SES-0217051), the Alfred P. Sloan Foundation, NCCR-FINRISK, the Research Priority Program on Finance and Financial Markets of the University of Zurich, and the Bank of Sweden Tercentenary Foundation is gratefully acknowledged.
ASJC Scopus subject areas
- Economics and Econometrics