Do Peers Influence Occupational Preferences? Evidence from Randomly-Assigned Peer Groups at West Point
66 Pages Posted: 6 Dec 2018
Date Written: July 20, 2018
Substantial variation exists across occupations in outcomes, such as earnings, job satisfaction, and health, yet little is known about how occupational preferences are shaped and evolve. This paper assesses a channel that may influence occupational preferences-peer effects-by exploiting unique institutional features and a natural experiment at West Point to document the way students' (i.e., cadets') occupational preferences evolve, and to test for peer effects. After graduation, cadets must enter the U.S. Army as an officer in one of 16 occupational branches, and are required to rank-order their preferences for the branches repeatedly over four years. West Point randomly assigns cadets to social groups, both at broad company and narrow roommate levels. We leverage the timing of the randomization and preference elicitations to test for peer effects at the company, roommate, and older-peer levels. After controlling for historical West Point-wide branch popularity, we find little evidence of peer effects in this context.
Keywords: Peer Effects, Occupational Choice
JEL Classification: J24, I23
Suggested Citation: Suggested Citation