Advanced Search
MyIDEAS: Login to save this paper or follow this series

Culture, Entrepreneurship, and Growth

Contents:

Author Info

  • Matthias Doepke
  • Fabrizio Zilibotti

Abstract

We discuss the two-way link between culture and economic growth. We present a model of endogenous technical change where growth is driven by the innovative activity of entrepreneurs. Entrepreneurship is risky and requires investments that affect the steepness of the lifetime consumption profile. As a consequence, the occupational choice of entrepreneurship hinges on risk tolerance and patience. Parents expecting their children to become entrepreneurs have an incentive to instill these two values in their children. Cultural transmission is Beckerian, i.e., parents are driven by the desire to maximize their children's happiness. We also consider, in an extension, a paternalistic motive for preference transmission. The growth rate of the economy depends on the fraction of the population choosing an entrepreneurial career. How many entrepreneurs there are in a society hinges, in turn, on parental investments in children's patience and risk tolerance. There can be multiple balanced-growth paths, where in faster-growing countries more people exhibit an "entrepreneurial spirit." We discuss applications of models of endogenous preferences to the analysis of socio-economic transformations, such as the British Industrial Revolution. We also discuss empirical studies documenting the importance of culture and preference heterogeneity for economic growth.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.nber.org/papers/w19141.pdf
Download Restriction: Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 19141.

as in new window
Length:
Date of creation: Jun 2013
Date of revision:
Handle: RePEc:nbr:nberwo:19141

Note: DEV EFG
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Phone: 617-868-3900
Email:
Web page: http://www.nber.org
More information through EDIRC

Related research

Keywords:

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Sáez-Martí, Maria & Zenou, Yves, 2011. "Cultural Transmission, Discrimination and Peer Effects," Research Papers in Economics, Stockholm University, Department of Economics 2011:3, Stockholm University, Department of Economics.
  2. Fabrizio Zilibotti & Matthias Doepke, 2014. "Parenting with Style: Altruism and Paternalism in Intergenerational Preference Transmission," 2014 Meeting Papers, Society for Economic Dynamics 343, Society for Economic Dynamics.
  3. Glenn Harrison & Morten Lau & Elisabet Rutstrom & Melonie Williams, 2002. "Estimating individual discount rates in denmark: A field experiment," Artefactual Field Experiments, The Field Experiments Website 00062, The Field Experiments Website.
  4. María Sáez-Martí & Anna Sjögren, 2008. "Peers and Culture," Scandinavian Journal of Economics, Wiley Blackwell, Wiley Blackwell, vol. 110(1), pages 73-92, 03.
  5. Alessandra Fogli & Raquel Fernandez, 2009. "Culture: An Empirical Investigation of Beliefs, Work, and Fertility," American Economic Journal: Macroeconomics, American Economic Association, vol. 1(1), pages 146-77, January.
  6. Nico Voigtländer & Joachim Voth, 2011. "Persecution perpetuated: The medieval origins of anti-semitic violence in Nazi Germany," Economics Working Papers, Department of Economics and Business, Universitat Pompeu Fabra 1269, Department of Economics and Business, Universitat Pompeu Fabra.
  7. Jean-Baptiste Michau, 2009. "Unemployment insurance and cultural transmission: theory and application to European unemployment," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 28605, London School of Economics and Political Science, LSE Library.
  8. Jesus Fernandez-Villaverde & Jeremy Greenwood & Nezih Guner, 2010. "From Shame to Game in One Hundred Years: An Economic Model of the Rise in Premarital Sex and its De-Stigmatization," Economie d'Avant Garde Research Reports, Economie d'Avant Garde 16, Economie d'Avant Garde.
  9. Maria Zumbuehl & Thomas Dohmen & Gerard Pfann, 2013. "Parental Investment and the Intergenerational Transmission of Economic Preferences and Attitudes," SOEPpapers on Multidisciplinary Panel Data Research 570, DIW Berlin, The German Socio-Economic Panel (SOEP).
  10. Hendricks, Lutz, 2007. "How important is discount rate heterogeneity for wealth inequality?," Journal of Economic Dynamics and Control, Elsevier, Elsevier, vol. 31(9), pages 3042-3068, September.
  11. Alberto F. Alesina & Paola Giuliano, 2009. "Preferences for Redistribution," NBER Working Papers 14825, National Bureau of Economic Research, Inc.
  12. Heckman, James J., 2000. "Policies to foster human capital," Research in Economics, Elsevier, Elsevier, vol. 54(1), pages 3-56, March.
  13. Sutter, Matthias & Kocher, Martin G. & Glätzle-Rützler, Daniela & Trautmann, Stefan T., 2010. "Impatience and Uncertainty: Experimental Decisions Predict Adolescents' Field Behavior," IZA Discussion Papers 5404, Institute for the Study of Labor (IZA).
  14. Botticini, Maristella & Eckstein, Zvi, 2004. "Jewish Occupational Selection: Education, Restrictions or Minorities?," CEPR Discussion Papers, C.E.P.R. Discussion Papers 4604, C.E.P.R. Discussion Papers.
  15. Quamrul Ashraf & Oded Galor, 2008. "Human Genetic Diversity and Comparative Economic Development," 2008 Meeting Papers 617, Society for Economic Dynamics.
  16. Matthias Doepke & Michèle Tertilt & Alessandra Voena, 2012. "The Economics and Politics of Women's Rights," Annual Review of Economics, Annual Reviews, Annual Reviews, vol. 4(1), pages 339-372, 07.
  17. Galor, Oded & Moav, Omer, 2000. "Natural Selection and the Origin of Economic Growth," Arbetsrapport, Institute for Futures Studies 2000:5, Institute for Futures Studies.
  18. Aghion, P. & Howitt, P., 1990. "A Model Of Growth Through Creative Destruction," DELTA Working Papers, DELTA (Ecole normale supérieure) 90-12, DELTA (Ecole normale supérieure).
  19. Galor, Oded & Michalopoulos, Stelios, 2012. "Evolution and the Growth Process: Natural Selection of Entrepreneurial Traits," IZA Discussion Papers 6327, Institute for the Study of Labor (IZA).
  20. Guido Tabellini, 2006. "Culture and institutions: economic development in the regions of Europe," Levine's Working Paper Archive 321307000000000241, David K. Levine.
  21. Giuliano, Paola, 2006. "Living Arrangements in Western Europe: Does Cultural Origin Matter?," IZA Discussion Papers 2042, Institute for the Study of Labor (IZA).
  22. Maristella Botticini & Zvi Eckstein, 2006. "Path Dependence and Occupations," Carlo Alberto Notebooks, Collegio Carlo Alberto 3, Collegio Carlo Alberto.
  23. Sáez-Martí, Maria & Zenou, Yves, 2010. "Cultural Transmission and Discrimination," CEPR Discussion Papers, C.E.P.R. Discussion Papers 7622, C.E.P.R. Discussion Papers.
  24. Daron Acemoglu & Philippe Aghion & Fabrizio Zilibotti, 2002. "Distance to Frontier, Selection, and Economic Growth," NBER Working Papers 9066, National Bureau of Economic Research, Inc.
  25. Raquel Fernández & Alessandra Fogli, 2005. "Fertility: The Role of Culture and Family Experience," NBER Working Papers 11569, National Bureau of Economic Research, Inc.
  26. Carmit Segal, 2013. "Misbehavior, Education, And Labor Market Outcomes," Journal of the European Economic Association, European Economic Association, European Economic Association, vol. 11(4), pages 743-779, 08.
  27. Rohner, Dominic & Thoenig, Mathias & Zilibotti, Fabrizio, 2011. "War Signals: A Theory of Trade, Trust and Conflict," CEPR Discussion Papers, C.E.P.R. Discussion Papers 8352, C.E.P.R. Discussion Papers.
  28. Dominic Rohner & Mathias Thoenig & Fabrizio Zilibotti, 2012. "Seeds of Distrust: Conflict in Uganda," OxCarre Working Papers, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford 078, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
  29. Acemoglu, Daron & Ticchi, Davide & Vindigni, Andrea, 2009. "Persistence of Civil Wars," Papers, Princeton University, Research Program in Political Economy 09-06-2009, Princeton University, Research Program in Political Economy.
  30. Zumbühl M.A. & Pfann G.A. & Pfann G.A. & Dohmen T.J., 2013. "Parental investment and the intergenerational transmission of economic preferences," ROA Research Memorandum, Maastricht University, Research Centre for Education and the Labour Market (ROA) 011, Maastricht University, Research Centre for Education and the Labour Market (ROA).
  31. Esther Hauk & Maria Sáez, 1999. "On the cultural transmission of corruption," Economics Working Papers, Department of Economics and Business, Universitat Pompeu Fabra 392, Department of Economics and Business, Universitat Pompeu Fabra.
  32. Marco Cozzi, 2013. "Risk Aversion Heterogeneity, Risky Jobs and Wealth Inequality," 2013 Meeting Papers, Society for Economic Dynamics 842, Society for Economic Dynamics.
  33. Dohmen, Thomas & Falk, Armin & Huffman, David B. & Sunde, Uwe, 2006. "The Intergenerational Transmission of Risk and Trust Attitudes," IZA Discussion Papers 2380, Institute for the Study of Labor (IZA).
  34. Daron Acemoglu & Alexander Wolitzky, 2012. "Cycles of Distrust: An Economic Model," Levine's Working Paper Archive 786969000000000502, David K. Levine.
  35. Gregory Clark & Gillian Hamilton, 2006. "Survival of the Richest: The Malthusian Mechanism in Pre-Industrial England," Working Papers, University of California, Davis, Department of Economics 615, University of California, Davis, Department of Economics.
  36. Pierre Cahuc & Andrei Shleifer & Philippe Aghion & Yann Algan, 2009. "Regulation and Distrust," Sciences Po publications 14648, Sciences Po.
  37. Fuchs-Schundeln, Nicola & Alesina, Alberto, 2007. "Good-Bye Lenin (Or Not?): The Effect of Communism on People's Preferences," Scholarly Articles 4553032, Harvard University Department of Economics.
  38. Algan, Yann & Cahuc, Pierre & Sangnier, Marc, 2011. "Efficient and Inefficient Welfare States," IZA Discussion Papers 5445, Institute for the Study of Labor (IZA).
  39. Yann Algan & Pierre Cahuc, 2013. "Trust and Growth," Annual Review of Economics, Annual Reviews, Annual Reviews, vol. 5(1), pages 521-549, 05.
  40. William Harbaugh & Kate Krause & Lise Vesterlund, 2002. "Risk attitudes of children and adults: Choices over small and large probability gains and losses," Artefactual Field Experiments, The Field Experiments Website 00055, The Field Experiments Website.
  41. Ernst Fehr & Karla Hoff, 2011. "Tastes, castes, and culture: The influence of society on preferences," ECON - Working Papers, Department of Economics - University of Zurich 026, Department of Economics - University of Zurich.
  42. Luigi Guiso & Monica Paiella, 2003. "Risk Aversion, Wealth and Background Risk," Temi di discussione (Economic working papers), Bank of Italy, Economic Research and International Relations Area 483, Bank of Italy, Economic Research and International Relations Area.
  43. Bisin, A. & Verdier, T., 1997. "The Economics of Cultural Transmission and the Dynamics of Preferences," DELTA Working Papers, DELTA (Ecole normale supérieure) 97-03, DELTA (Ecole normale supérieure).
  44. James J. Heckman & Jora Stixrud & Sergio Urzua, 2006. "The Effects of Cognitive and Noncognitive Abilities on Labor Market Outcomes and Social Behavior," NBER Working Papers 12006, National Bureau of Economic Research, Inc.
  45. Matsuyama, Kiminori, 1996. "Growing Through Cycles," Economics Series, Institute for Advanced Studies 40, Institute for Advanced Studies.
  46. Matthias Doepke & Michele Tertilt, 2008. "Women's Liberation: What's in It for Men?," Discussion Papers, Stanford Institute for Economic Policy Research 07-037, Stanford Institute for Economic Policy Research.
  47. Baudin, Thomas, 2010. "A Role For Cultural Transmission In Fertility Transitions," Macroeconomic Dynamics, Cambridge University Press, Cambridge University Press, vol. 14(04), pages 454-481, September.
  48. Quamrul Ashraf & Oded Galor, 2011. "Cultural Diversity, Geographical Isolation, and the Origin of the Wealth of Nations," Department of Economics Working Papers, Department of Economics, Williams College 2011-15, Department of Economics, Williams College.
  49. Raymond Fisman & Edward Miguel, 2007. "Corruption, Norms, and Legal Enforcement: Evidence from Diplomatic Parking Tickets," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 115(6), pages 1020-1048, December.
  50. Guiso, Luigi & Sapienza, Paola & Zingales, Luigi, 2006. "Does Culture Affect Economic Outcomes?," CEPR Discussion Papers, C.E.P.R. Discussion Papers 5505, C.E.P.R. Discussion Papers.
  51. Mariacristina De Nardi, 2004. "Wealth Inequality and Intergenerational Links," Review of Economic Studies, Oxford University Press, vol. 71(3), pages 743-768.
  52. Coen-Pirani, Daniele, 2004. "Effects Of Differences In Risk Aversion On The Distribution Of Wealth," Macroeconomic Dynamics, Cambridge University Press, Cambridge University Press, vol. 8(05), pages 617-632, November.
  53. Quamrul Ashraf & Oded Galor, 2010. "The "Out of Africa" Hypothesis, Human Genetic Diversity, and Comparative Economic Development," Working Papers 2010-7, Brown University, Department of Economics.
  54. John Hassler & José V. Rodríguez Mora & Kjetil Storesletten & Fabrizio Zilibotti, 2005. "A Positive Theory Of Geographic Mobility And Social Insurance," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 46(1), pages 263-303, 02.
  55. James Heckman & Pedro Carneiro, 2003. "Human Capital Policy," NBER Working Papers 9495, National Bureau of Economic Research, Inc.
  56. Piketty, Thomas, 1995. "Social Mobility and Redistributive Politics," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 110(3), pages 551-84, August.
  57. Becker, Gary S & Mulligan, Casey B, 1997. "The Endogenous Determination of Time Preference," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 112(3), pages 729-58, August.
  58. Zheng Song & Kjetil Storesletten & Fabrizio Zilibotti, 2007. "Rotten parents and disciplined children: a politico-economic theory of public expenditure and debt," IEW - Working Papers 325, Institute for Empirical Research in Economics - University of Zurich.
  59. Lindbeck, Assar & Nyberg, Sten, 2001. "Raising Children to Work Hard: Altruism, Work Norms and Social Insurance," Research Papers in Economics, Stockholm University, Department of Economics 2001:5, Stockholm University, Department of Economics.
  60. Maarten J. Voors & Eleonora E. M. Nillesen & Philip Verwimp & Erwin H. Bulte & Robert Lensink & Daan P. Van Soest, 2012. "Violent Conflict and Behavior: A Field Experiment in Burundi," American Economic Review, American Economic Association, American Economic Association, vol. 102(2), pages 941-64, April.
  61. Guvenen, Fatih, 2006. "Reconciling conflicting evidence on the elasticity of intertemporal substitution: A macroeconomic perspective," Journal of Monetary Economics, Elsevier, Elsevier, vol. 53(7), pages 1451-1472, October.
  62. Becker, Sascha O. & Wößmann, Ludger, 2007. "Was Weber Wrong? A Human Capital Theory of Protestant Economic History," Discussion Papers in Economics, University of Munich, Department of Economics 1366, University of Munich, Department of Economics.
  63. Alberto Alesina & Nichola Fuchs Schuendeln, 2005. "Good bye Lenin (or not?): The Effect of Communism on People's Preferences," NBER Working Papers 11700, National Bureau of Economic Research, Inc.
  64. Per Krusell & Anthony A. Smith & Jr., 1998. "Income and Wealth Heterogeneity in the Macroeconomy," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 106(5), pages 867-896, October.
  65. Matthias Doepke & Fabrizio Zilibotti, 2007. "Occupational Choice and the Spirit of Capitalism," NBER Working Papers 12917, National Bureau of Economic Research, Inc.
  66. Samuel Bowles & Herbert Gintis, 2002. "The Inheritance of Inequality," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 16(3), pages 3-30, Summer.
  67. William Harbaugh & Kate Krause & Lise Vesterlund, 2002. "Risk Attitudes of Children and Adults: Choices Over Small and Large Probability Gains and Losses," Experimental Economics, Springer, Springer, vol. 5(1), pages 53-84, June.
  68. Cahuc, Pierre & Algan, Yann & Aghion, Philippe, 2009. "Civil Society and the State: The Interplay between Cooperation and Minimum Wage Regulation," Scholarly Articles 3226957, Harvard University Department of Economics.
  69. Cramer, J. S. & Hartog, J. & Jonker, N. & Van Praag, C. M., 2002. "Low risk aversion encourages the choice for entrepreneurship: an empirical test of a truism," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 48(1), pages 29-36, May.
  70. Christopher D. Carroll & Lawrence H. Summers, 1991. "Consumption Growth Parallels Income Growth: Some New Evidence," NBER Chapters, in: National Saving and Economic Performance, pages 305-348 National Bureau of Economic Research, Inc.
  71. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2002. "People's Opium? Religion and Economic Attitudes," NBER Working Papers 9237, National Bureau of Economic Research, Inc.
  72. Patricia Beeson & Tara Watson & Lara Shore-Sheppard, 2010. "Local Fiscal Policies and Urban Wage Structures," Department of Economics Working Papers, Department of Economics, Williams College 2010-05, Department of Economics, Williams College.
  73. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth Through Creative Destruction," Scholarly Articles 12490578, Harvard University Department of Economics.
  74. Maria Saez-Marti & Fabrizio Zilibotti, 2008. "Preferences as Human Capital: Rational Choice Theories of Endogenous Preferences and Socioeconomic Changes," Finnish Economic Papers, Finnish Economic Association, Finnish Economic Association, vol. 21(2), pages 81-94, Autumn.
  75. Alessandra Fogli & Laura Veldkamp, 2008. "Nature or Nurture? Learning and the Geography of Female Labor Force Participation," NBER Working Papers 14097, National Bureau of Economic Research, Inc.
  76. Matthias Doepke & Fabrizio Zilibotti, 2005. "Social Class and the Spirit of Capitalism," Journal of the European Economic Association, MIT Press, MIT Press, vol. 3(2-3), pages 516-524, 04/05.
  77. Galina Vereshchagina & Hugo A. Hopenhayn, 2009. "Risk Taking by Entrepreneurs," American Economic Review, American Economic Association, American Economic Association, vol. 99(5), pages 1808-30, December.
  78. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 98(5), pages S71-102, October.
  79. Raquel Fernández & Alessandra Fogli & Claudia Olivetti, 2004. "Mothers and Sons: Preference Formation and Female Labor Force Dynamics," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 119(4), pages 1249-1299, November.
  80. Tiago Cavalcanti & Stephen Parente & Rui Zhao, 2007. "Religion in macroeconomics: a quantitative analysis of Weber’s thesis," Economic Theory, Springer, Springer, vol. 32(1), pages 105-123, July.
  81. Greif, Avner, 1994. "Cultural Beliefs and the Organization of Society: A Historical and Theoretical Reflection on Collectivist and Individualist Societies," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 102(5), pages 912-50, October.
  82. McCleary, Rachel & Barro, Robert, 2003. "Religion and Economic Growth across Countries," Scholarly Articles 3708464, Harvard University Department of Economics.
  83. Kamhon Kan & Wei-Der Tsai, 2006. "Entrepreneurship and Risk Aversion," Small Business Economics, Springer, Springer, vol. 26(5), pages 465-474, 06.
  84. Smith, Adam, 1776. "An Inquiry into the Nature and Causes of the Wealth of Nations," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, McMaster University Archive for the History of Economic Thought, number smith1776.
  85. Alberto Alesina & Nicola Fuchs-Schündeln, 2007. "Goodbye Lenin (or Not?): The Effect of Communism on People," American Economic Review, American Economic Association, American Economic Association, vol. 97(4), pages 1507-1528, September.
  86. Gorodnichenko, Yuriy & Roland, Gérard, 2010. "Culture, Institutions and the Wealth of nations," CEPR Discussion Papers, C.E.P.R. Discussion Papers 8013, C.E.P.R. Discussion Papers.
  87. Stigler, George J & Becker, Gary S, 1977. "De Gustibus Non Est Disputandum," American Economic Review, American Economic Association, American Economic Association, vol. 67(2), pages 76-90, March.
  88. van Praag, C M & Cramer, J S, 2001. "The Roots of Entrepreneurship and Labour Demand: Individual Ability and Low Risk Aversion," Economica, London School of Economics and Political Science, London School of Economics and Political Science, vol. 68(269), pages 45-62, February.
  89. Kihlstrom, Richard E & Laffont, Jean-Jacques, 1979. "A General Equilibrium Entrepreneurial Theory of Firm Formation Based on Risk Aversion," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 87(4), pages 719-48, August.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:19141. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.