Shore, Stephen HBarth, DanielJensen, Shane T2023-05-232023-05-232012-10-012019-06-27https://repository.upenn.edu/handle/20.500.14332/43576How important to well-being is choosing a career with the right fit? This question is difficult to answer because we observe individuals only in their chosen careers, not in the other (presumably inferior) options they did not choose. To overcome this problem, we use expected utility to cardinalize a logit model of career choice in a setting where we observe the income risk of chosen careers and the risk-aversion of the people who choose them. The key parameter of interest - the importance of idiosyncratic taste and skill in career choice - is identified from the shift in the distribution of income risk with risk aversion. We estimate the model using individual-specific measures of income volatility to proxy for income risk and survey questions about hypothetical income gambles to proxy for risk preference, both from the PSID. We separate idiosyncratic career taste from skill using the pay gap between high and low-income risk people with high and low risk-aversion.All findings, interpretations, and conclusions of this paper do not represent the views of the the Wharton School or the Boettner Center for Pensions and Retirement Research. © 2012 Boettner Center of the Wharton School of the University of Pennsylvania. All rights reserved.Occupational choicecareer choiceincome riskidiosyncratic taste and skillEconomicsWorking Paper