Sociological forces

To better appreciate the extent to which family background and socioeconomic class create noncompeting groups in the labor force consider a current day example - President of the United States Barack Hussein Obama and former President William Jefferson Clinton who both came out of average families (blue collar background).

Presently fierce competition exists for admission to medical school because of the high income and status that it leads to. Do family background and social class have any bearing on the individuals who are ultimately accepted? To be more specific is the fact that an applicant is the son of a bus operator or a daughter of a bank executive likely to have any independent influence on who eventually becomes a doctor and who does not? 

Some economists would argue that family background has relatively little impact pointing to numerous examples of people who have risen from very humble beginnings to positions of great wealth (and vice versa). Others however would argue that family background is quite important admitting that while there is some movement between broad socioeconomic groups individuals as a rule do not move far from their parents’ occupational and social position. 

This question is obviously quite complex and subject to considerable debate. It is also quite important because one’s position on this issue is likely significantly influenced on one’s view of the social merits of relying on market forces as the distributor of economic rewards in society. The greater the opportunity of individuals (their sons and daughters) to move up and down the occupational ladder is a consequence of their own efforts and decisions on the greater argument for relying on the market. If however one’s station in life is largely determined by the accidents of birth and inheritance then the market merely passes on the status quo from one generation to another.

The other aspect of the sociological factors that affect labor market outcome is through the influence on the supply of labor and the determination of wages and earnings in the labor market. In some cases sociological factors influence wages independently of the market forces of supply and demand. While in others these sociological factors work through market forces as they influence the supply of labor to the economy or to specific occupations and industries. With respect to the latter an individual’s decision about the amount of work versus leisure or choice of occupations for example involves not only a consideration of market opportunities such as wages and employment prospects but also the individual’s psychological feelings about which choice is valued more. Economists have always recognized this psychological aspect of choice and include it in economic theory under the rubric of ‘preferences’ or ‘tastes’. Thus whether a person chooses to become a bus operator, station agent or a track worker for example depends not only on the wages that can be earned in each title but also on the individual’s preference or taste for each line of work.