IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this book chapter or follow this series

Culture, Entrepreneurship, and Growth

In: Handbook of Economic Growth

  • Doepke, Matthias
  • Zilibotti, Fabrizio

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.

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.sciencedirect.com/science/article/pii/B9780444535382000010
Download Restriction: Full text for ScienceDirect subscribers only

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.

as
in new window

This chapter was published in:
  • Philippe Aghion & Steven Durlauf (ed.), 2013. "Handbook of Economic Growth," Handbook of Economic Growth, Elsevier, edition 1, volume 2, number 2.
  • This item is provided by Elsevier in its series Handbook of Economic Growth with number 2-1.
    Handle: RePEc:eee:grochp:2-1
    Contact details of provider: Web page: http://www.elsevier.com/wps/find/bookseriesdescription.cws_home/BS_HE/description

    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. Matthias Doepke, . "Occupational Choice and the Spirit of Capitalism," UCLA Economics Online Papers 419, UCLA Department of Economics.
    2. Rohner, D. & Thoenig, M. & Zilibotti, F., 2011. "War Signals: A Theory of Trade, Trust and Conflict," Cambridge Working Papers in Economics 1136, Faculty of Economics, University of Cambridge.
    3. Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde, 2012. "The Intergenerational Transmission of Risk and Trust Attitudes," Review of Economic Studies, Oxford University Press, vol. 79(2), pages 645-677.
    4. Quamrul Ashraf & Oded Galor, 2013. "The 'Out of Africa' Hypothesis, Human Genetic Diversity, and Comparative Economic Development," American Economic Review, American Economic Association, vol. 103(1), pages 1-46, February.
    5. Becker, Sascha O. & Wößmann, Ludger, 2009. "Was Weber Wrong? A Human Capital Theory of Protestant Economic History," Munich Reprints in Economics 20255, University of Munich, Department of Economics.
    6. Mariacristina De Nardi, 2004. "Wealth Inequality and Intergenerational Links," Review of Economic Studies, Oxford University Press, vol. 71(3), pages 743-768.
    7. Matthias Doepke & Michèle Tertilt, 2009. "Women's Liberation: What's in It for Men?," The Quarterly Journal of Economics, MIT Press, vol. 124(4), pages 1541-1591, November.
    8. Gorodnichenko, Yuriy & Roland, Gerald, 2010. "Culture, Institutions and the Wealth of Nations," IZA Discussion Papers 5187, Institute for the Study of Labor (IZA).
    9. 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.
    10. Bisin, A. & Verdier, T., 1997. "The Economics of Cultural Transmission and the Dynamics of Preferences," DELTA Working Papers 97-03, DELTA (Ecole normale supérieure).
    11. Assar Lindbeck & Sten Nyberg, 2001. "Raising Children to Work Hard: Altruism, Work Norms and Social Insurance," CESifo Working Paper Series 498, CESifo Group Munich.
    12. Hassler, John & Mora, José V Rodríguez & Storesletten, Kjetil & Zilibotti, Fabrizio, 2001. "A Positive Theory of Geographic Mobility and Social Insurance," CEPR Discussion Papers 2964, C.E.P.R. Discussion Papers.
    13. Algan, Yann & Cahuc, Pierre & Sangnier, Marc, 2014. "Trust and the Welfare State: The Twin Peaks Curve," IZA Discussion Papers 8277, Institute for the Study of Labor (IZA).
    14. 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, vol. 102(5), pages 912-50, October.
    15. Algan, Yann & Cahuc, Pierre & Sangnier, Marc, 2011. "Efficient and Inefficient Welfare States," CEPR Discussion Papers 8229, C.E.P.R. Discussion Papers.
    16. Stigler, George J & Becker, Gary S, 1977. "De Gustibus Non Est Disputandum," American Economic Review, American Economic Association, vol. 67(2), pages 76-90, March.
    17. Acemoglu, Daron & Ticchi, Davide & Vindigni, Andrea, 2009. "Persistence of Civil Wars," IZA Discussion Papers 4418, Institute for the Study of Labor (IZA).
    18. Hauk, Esther & Sáez-Martí, María, 2001. "On the Cultural Transmission of Corruption," Working Paper Series 564, Research Institute of Industrial Economics.
    19. Alberto F. Alesina & Paola Giuliano, 2009. "Preferences for Redistribution," NBER Working Papers 14825, National Bureau of Economic Research, Inc.
    20. Doepke, Matthias & Zilibotti, Fabrizio, 2012. "Parenting with Style: Altruism and Paternalism in Intergenerational Preference Transmission," IZA Discussion Papers 7108, Institute for the Study of Labor (IZA).
    21. Jesús Fernández-Villaverde & Jeremy Greenwood & Nezih Guner, 2014. "From Shame To Game In One Hundred Years: An Economic Model Of The Rise In Premarital Sex And Its De-Stigmatization," Journal of the European Economic Association, European Economic Association, vol. 12(1), pages 25-61, 02.
    22. 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, vol. 68(269), pages 45-62, February.
    23. Luigi Guiso & Monica Paiella, 2008. "Risk Aversion, Wealth, and Background Risk," Journal of the European Economic Association, MIT Press, vol. 6(6), pages 1109-1150, December.
    24. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2002. "People's Opium? Religion and Economic Attitudes," NBER Working Papers 9237, National Bureau of Economic Research, Inc.
    25. Kamhon KAN & Wei-Der TSAI, 2005. "Entrepreneurship and Risk Aversion," IEAS Working Paper : academic research 05-A008, Institute of Economics, Academia Sinica, Taipei, Taiwan.
    26. Dominic Rohner & Mathias Thoenig & Fabrizio Zilibotti, 2013. "Seeds of distrust: conflict in Uganda," Journal of Economic Growth, Springer, vol. 18(3), pages 217-252, September.
    27. Oded Galor & Stelios Michalopoulos, 2011. "Evolution and the Growth Process: Natural Selection of Entrepreneurial Traits," Levine's Working Paper Archive 786969000000000116, David K. Levine.
    28. Jean-Baptiste Michau, 2009. "Unemployment insurance and cultural transmission: theory and application to European unemployment," LSE Research Online Documents on Economics 28605, London School of Economics and Political Science, LSE Library.
    29. Baudin, Thomas, 2010. "A Role For Cultural Transmission In Fertility Transitions," Macroeconomic Dynamics, Cambridge University Press, vol. 14(04), pages 454-481, September.
    30. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth Through Creative Destruction," Scholarly Articles 12490578, Harvard University Department of Economics.
    31. Sáez-Martı´, Maria & Zenou, Yves, 2012. "Cultural transmission and discrimination," Journal of Urban Economics, Elsevier, vol. 72(2), pages 137-146.
    32. Quamrul Ashraf & Oded Galor, 2011. "Cultural Diversity, Geographical Isolation, and the Origin of the Wealth of Nations," Center for Development Economics 2011-10, Department of Economics, Williams College.
    33. Galina Vereshchagina & Hugo A. Hopenhayn, 2009. "Risk Taking by Entrepreneurs," American Economic Review, American Economic Association, vol. 99(5), pages 1808-30, December.
    34. Matthias Sutter & Martin G. Kocher & Daniela Ruetzler & Stefan T. Trautmann, 2010. "Impatience and uncertainty: Experimental decisions predict adolescents? field behavior," Working Papers 2010-29, Faculty of Economics and Statistics, University of Innsbruck.
    35. Sáez-Martí, Maria & Zenou, Yves, 2011. "Cultural Transmission, Discrimination and Peer Effects," Research Papers in Economics 2011:3, Stockholm University, Department of Economics.
    36. Thomas Piketty, 1994. "Social Mobility and Redistributive Politics," Working papers 94-15, Massachusetts Institute of Technology (MIT), Department of Economics.
    37. Per Krusell & Anthony A. Smith, Jr., . "Income and Wealth Heterogeneity in the Macroeconomy," GSIA Working Papers 1997-37, Carnegie Mellon University, Tepper School of Business.
    38. Raquel Fernández & Alessandra Fogli, 2005. "Fertility: The Role of Culture and Family Experience," NBER Working Papers 11569, National Bureau of Economic Research, Inc.
    39. Maria Zumbuhl & Thomas Dohmen & Gerard Pfann, 2013. "Parental Investment and the Intergenerational Transmission of Economic Preferences and Attitudes," Working Papers 2013-018, Human Capital and Economic Opportunity Working Group.
    40. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2006. "Does Culture Affect Economic Outcomes?," Journal of Economic Perspectives, American Economic Association, vol. 20(2), pages 23-48, Spring.
    41. Zheng Song, 2009. "Rotten Parents and Disciplined Children: A Politico-Economic Theory of Public Expenditure and Debt," 2009 Meeting Papers 94, Society for Economic Dynamics.
    42. Lutz Hendricks, 2005. "How Important is Discount Rate Heterogeneity for Wealth Inequality?," CESifo Working Paper Series 1604, CESifo Group Munich.
    43. James J. Heckman, 2000. "Policies to Foster Human Capital," JCPR Working Papers 154, Northwestern University/University of Chicago Joint Center for Poverty Research.
    44. Guido Tabellini, 2010. "Culture and Institutions: Economic Development in the Regions of Europe," Journal of the European Economic Association, MIT Press, vol. 8(4), pages 677-716, 06.
    45. 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.
    46. 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.
    47. Tiago Cavalcanti & Stephen Parente & Rui Zhao, 2007. "Religion in macroeconomics: a quantitative analysis of Weber’s thesis," Economic Theory, Springer, vol. 32(1), pages 105-123, July.
    48. Marco Cozzi, 2013. "Risk Aversion Heterogeneity, Risky Jobs and Wealth Inequality," 2013 Meeting Papers 842, Society for Economic Dynamics.
    49. Carmit Segal, 2013. "Misbehavior, Education, And Labor Market Outcomes," Journal of the European Economic Association, European Economic Association, vol. 11(4), pages 743-779, 08.
    50. Yann Algan & Pierre Cahuc, 2013. "Trust and Growth," Annual Review of Economics, Annual Reviews, vol. 5(1), pages 521-549, 05.
    51. 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.
    52. Botticini, Maristella & Eckstein, Zvi, 2004. "Jewish Occupational Selection: Education, Restrictions, or Minorities?," IZA Discussion Papers 1224, Institute for the Study of Labor (IZA).
    53. Nico Voigtländer & Hans-Joachim Voth, 2011. "Persecution Perpetuated: The Medieval Origins of Anti-Semitic Violence in Nazi Germany," Working Papers 551, Barcelona Graduate School of Economics.
    54. Maristella Botticini & Zvi Eckstein, 2006. "Path Dependence and Occupations," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series DP-154, Boston University - Department of Economics.
    55. Alessandra Fogli & Raquel Fernandez, 2005. "Culture: An Empirical Investigation of Beliefs, Work, and Fertility," Working Papers 05-07, New York University, Leonard N. Stern School of Business, Department of Economics.
    56. Aghion, P. & Howitt, P., 1989. "A Model Of Growth Through Creative Destruction," UWO Department of Economics Working Papers 8904, University of Western Ontario, Department of Economics.
    57. Ernst Fehr & Karla Hoff, 2011. "Tastes, castes, and culture: The influence of society on preferences," ECON - Working Papers 026, Department of Economics - University of Zurich.
    58. Clark, Gregory & Hamilton, Gillian, 2006. "Survival of the Richest: The Malthusian Mechanism in Pre-Industrial England," The Journal of Economic History, Cambridge University Press, vol. 66(03), pages 707-736, September.
    59. Pierre Cahuc & Andrei Shleifer & Philippe Aghion & Yann Algan, 2009. "Regulation and Distrust," Sciences Po publications 14648, Sciences Po.
    60. Matthias Doepke & Michèle Tertilt & Alessandra Voena, 2012. "The Economics and Politics of Women's Rights," Annual Review of Economics, Annual Reviews, vol. 4(1), pages 339-372, 07.
    61. Oded Galor & Quamrul Ashraf, 2008. "Human Genetic Diversity and Comparative Economic Development," Working Papers 2008-3, Brown University, Department of Economics.
    62. Patricia Beeson & Tara Watson & Lara Shore-Sheppard, 2010. "Local Fiscal Policies and Urban Wage Structures," Department of Economics Working Papers 2010-05, Department of Economics, Williams College.
    63. Samuel Bowles & Herbert Gintis, 2002. "The Inheritance of Inequality," Journal of Economic Perspectives, American Economic Association, vol. 16(3), pages 3-30, Summer.
    64. 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.
    65. Glenn W. Harrison & Morten I. Lau & Melonie B. Williams, 2001. "Estimating Individual Discount Rates in Denmark: A Field Experiment," NCEE Working Paper Series 200102, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Nov 2001.
    66. 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, vol. 87(4), pages 719-48, August.
    67. 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, vol. 102(2), pages 941-64, April.
    68. 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 011, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    69. 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, vol. 5(1), pages 53-84, June.
    70. Paul Romer, 1989. "Endogenous Technological Change," NBER Working Papers 3210, National Bureau of Economic Research, Inc.
    71. Daron Acemoglu & Alexander Wolitzky, 2012. "Cycles of Distrust: An Economic Model," Levine's Working Paper Archive 786969000000000502, David K. Levine.
    72. Daron Acemoglu & Philippe Aghion & Fabrizio Zilibotti, 2006. "Distance to Frontier, Selection, and Economic Growth," Journal of the European Economic Association, MIT Press, vol. 4(1), pages 37-74, 03.
    73. Giuliano, Paola, 2006. "Living Arrangements in Western Europe: Does Cultural Origin Matter?," IZA Discussion Papers 2042, Institute for the Study of Labor (IZA).
    74. Klasing, Mariko J., 2014. "Cultural change, risk-taking behavior and implications for economic development," Journal of Development Economics, Elsevier, vol. 110(C), pages 158-169.
    75. Matsuyama, Kiminori, 1996. "Growing Through Cycles," Economics Series 40, Institute for Advanced Studies.
    76. Alberto Alesina & Nicola Fuchs-Schundeln, 2005. "Good bye Lenin (or not?): The effect of Communism on people's preferences," Harvard Institute of Economic Research Working Papers 2076, Harvard - Institute of Economic Research.
    77. Oded Galor & Omer Moav, 2002. "Natural Selection And The Origin Of Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 117(4), pages 1133-1191, November.
    78. McCleary, Rachel & Barro, Robert, 2003. "Religion and Economic Growth across Countries," Scholarly Articles 3708464, Harvard University Department of Economics.
    79. María Sáez-Martí & Anna Sjögren, 2008. "Peers and Culture," Scandinavian Journal of Economics, Wiley Blackwell, vol. 110(1), pages 73-92, 03.
    80. James Heckman & Pedro Carneiro, 2003. "Human Capital Policy," NBER Working Papers 9495, National Bureau of Economic Research, Inc.
    81. Becker, Gary S & Mulligan, Casey B, 1997. "The Endogenous Determination of Time Preference," The Quarterly Journal of Economics, MIT Press, vol. 112(3), pages 729-58, August.
    82. M. Fatih Guvenen, 2002. "Reconciling Conflicting Evidence on the Elasticity of Intertemporal Substitution: A Macroeconomic Perspective," RCER Working Papers 491, University of Rochester - Center for Economic Research (RCER), revised Mar 2003.
    83. 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, vol. 48(1), pages 29-36, May.
    84. Alberto Alesina & Nicola Fuchs-Schündeln, 2007. "Goodbye Lenin (or Not?): The Effect of Communism on People," American Economic Review, American Economic Association, vol. 97(4), pages 1507-1528, September.
    85. Matthias Doepke & Fabrizio Zilibotti, 2005. "Social Class and the Spirit of Capitalism," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 516-524, 04/05.
    86. Coen-Pirani, Daniele, 2004. "Effects Of Differences In Risk Aversion On The Distribution Of Wealth," Macroeconomic Dynamics, Cambridge University Press, vol. 8(05), pages 617-632, November.
    87. Raymond Fisman & Edward Miguel, 2007. "Corruption, Norms, and Legal Enforcement: Evidence from Diplomatic Parking Tickets," Journal of Political Economy, University of Chicago Press, vol. 115(6), pages 1020-1048, December.
    88. 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, number smith1776.
    89. Raquel Fernández & Alessandra Fogli & Claudia Olivetti, 2004. "Mothers and Sons: Preference Formation and Female Labor Force Dynamics," The Quarterly Journal of Economics, MIT Press, vol. 119(4), pages 1249-1299, November.
    90. 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, vol. 21(2), pages 81-94, Autumn.
    Full references (including those not matched with items on IDEAS)

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

    When requesting a correction, please mention this item's handle: RePEc:eee:grochp:2-1. 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: (Zhang, Lei)

    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.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.