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Social Attitudes and Economic Development: An Epidemiological Approach

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Author Info
Yann Algan () (Université Marne la Vallée, CEPREMAP and IZA)
Pierre Cahuc () (University Paris 1, CREST-INSEE, CEPR and IZA)

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Abstract

In this paper we develop a new empirical approach to uncovering the impact of social attitudes on economic development. We first show that trust of second-generation Americans is significantly influenced by the country of origin of their forebears. In the spirit of the epidemiology literature, we interpret this phenomenon as the consequence of inherited social attitudes. We show that trust inherited by second-generation Americans from their country of origins has changed over time. This result allows us to use the inherited trust of secondgeneration Americans as a time-varying instrument to track back the evolution of trust in the home country of their parents. This strategy enables us to identify the specific impact of inherited trust on economic development relative to other traditional candidates, such as institutions and geography, by controlling for country fixed effects. We find that inherited trust has explained a substantial share of economic development on a sample of 30 countries during the post-war period, by improving total factor productivity and the accumulation of human and physical capital.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2935.

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Length: 49 pages
Date of creation: Jul 2007
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Handle: RePEc:iza:izadps:dp2935

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Related research
Keywords: social capital trust economic development growth

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Find related papers by JEL classification:
O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
F10 - International Economics - - Trade - - - General
P10 - Economic Systems - - Capitalist Systems - - - General
N13 - Economic History - - Macroeconomics and Monetary Economics; Growth and Fluctuations - - - Europe: Pre-1913

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References listed on IDEAS
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  1. Alesina, Alberto & La Ferrara, Eliana, 2002. "Who trusts others?," Journal of Public Economics, Elsevier, vol. 85(2), pages 207-234, August. [Downloadable!] (restricted)
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  2. Yann Algan & Pierre Cahuc, 2005. "The Roots of Low European Employment: Family Culture?," IZA Discussion Papers 1683, Institute for the Study of Labor (IZA). [Downloadable!]
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