Occupational Choice and the Endogenous Supply of Ability

I develop a selection model in which the individual’s supply of ability is endogenous and subject to selection along with occupation. Additionally, I identify and estimate the returns to creative and innovative ability, communication ability, and reading and math ability for white-collar and blue-collar workers. The model permits a person’s choice of occupation to influence his decision regarding the amount of ability to supply. The empirical results show that the individual’s supply of ability should be allowed to be endogenous to correct for sample selection bias caused by occupational choice.