Strong institutions attract talent to productive activities, whereas weak ones raise the appeal
of rent seeking. We propose a theory that describes the impact of institutions on
occupational choices over a range of abilities, and predicts that the sensitivity of such
choices to the quality of institutions rises in talent when the latter increases from low to
intermediate levels, and declines thereafter. To test these predictions empirically, we use a
unique micro data set describing the choices of fields of studies by newly enrolled university …