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From Family Culture to Welfare State Design

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  • Vincenzo Galasso
  • Paola Profeta

Abstract

We study how family culture affected the initial welfare state design. Our theoretical framework shows that pre-existing institutions — namely inheritance rules — shaped the within family intergenerational transmission of resources. This organization is embedded in the family culture that later affected the design of pension systems. Countries with equalitarian inheritance rules acquired a non-individualistic family culture that induced the adoption of generous Bismarckian pension systems, whereas non-equalitarian inheritance rules nurtured family independence and led to Beveridgean (safety net) pension systems. Cross countries analyses using historical inheritance rules support these predictions, and results are robust to controlling for alternative legal, religious, demographic, economic and political explanations. Evidence from individual data confirm these findings: US citizens whose ancestors came from countries featuring equal inheritance rules prefer to rely on the government as a provider of old age security through generous retirement benefits.

Suggested Citation

  • Vincenzo Galasso & Paola Profeta, 2013. "From Family Culture to Welfare State Design," CHILD Working Papers Series 14, Centre for Household, Income, Labour and Demographic Economics (CHILD) - CCA.
  • Handle: RePEc:cca:wchild:14
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    Cited by:

    1. Graziella Bertocchi & Monica Bozzano, 2015. "Family Structure and the Education Gender Gap: Evidence from Italian Provinces," CESifo Economic Studies, CESifo, vol. 61(1), pages 263-300.

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    More about this item

    Keywords

    culture; inheritance rules; pension design. JEL Classifications: Z10; Z13; N30; H10; H55.;
    All these keywords.

    JEL classification:

    • Z10 - Other Special Topics - - Cultural Economics - - - General
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification
    • N30 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - General, International, or Comparative
    • H10 - Public Economics - - Structure and Scope of Government - - - General

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