This paper examines how heterogeneity in the taste for luxury consumption contributes to occupational sorting and, consequently, to the intergenerational correlation of income and consumption. I show that individuals with a higher taste for luxury consumption demonstrate lower risk-aversion and a higher IES. As a result, they are more willing to sort into risky, back-loaded occupations with higher lifetime earnings. Using expanded consumption data from the PSID, I document substantial variation in luxury expenditure shares and show that these shares are correlated between childhood and adulthood. I interpret these facts as evidence that heterogeneous tastes for luxury are transmitted intergenerationally, with childhood consumption experiences shaping adult preferences for luxury versus necessity. To quantify this mechanism, I develop a two-generation model of the household in which parental influence over children’s luxury tastes affects occupational choice. Shutting down the intergenerational transmission of luxury taste reduces the intergenerational correlation of income by 12.4%, indicating that this mechanism explains a meaningful share of persistence in economic status.

 Wealth is widely considered to be “health-preserving,” yet it remains an empirical challenge to separate these effects from the endogenous savings targets of individuals with different expected longevities. Naturally, individuals who expect to live longer will save more. This paper disciplines endogenous savings behavior by studying how consumption and saving respond to shocks to expected longevity. I use parental health and mortality events as novel sources of variation in individuals’ perceived longevity. I first show that subjective mortality beliefs increase sharply following a parent’s death, with larger updates when the parent dies younger. I then show that individuals increase consumption following a parental death or negative health shock and reduce it following positive parental health shocks. Again, these magnitudes are declining in parental age at the event. These findings suggest that individuals learn about their own expected longevities from their parents’ health outcomes and adjust their consumption–saving behavior accordingly. I develop a model of learning about heterogeneous health types with health-preserving wealth effects, which allows me to disentangle the direct effect of wealth on health from the endogenous response of savings to expected longevity.