Economics of Cultural Change: Openness, Interaction, and Intergenerational Transmission

"Culture shapes economic and social life, yet some traits erode quickly, while others persist across generations. Migrant experiences towards Europe or the United States illustrate this puzzle. In addition, some traits, such as fertility norms, tend to converge relatively quickly, whereas others, such as religiosity, exhibit substantially greater persistence. We develop a dynamic model of cultural transmission that endogenizes both cross-cultural group interaction and parental influence on cultural openness defined as a parentally transmitted willingness to adopt a new cultural trait when beneficial. Parents first shape cultural transmission by choosing their children’s openness to alternative traits. As young adults, individuals then decide how much to interact with other groups and, conditional on interaction, whether to switch traits. This endogenizes peer exposure and makes cultural change a deliberate choice. Within a generation, a higher group-level propensity to switch reduces group size, while tighter norms can expand or shrink a group depending on the relative utility of its trait. Across generations, parental investments in openness generate three long-run equilibria: convergence to a single trait, coexistence with interaction, or segregation without interaction. By jointly modeling parental transmission and peer-driven switching, we show that cultural persistence or change reflects purposeful micro-level decisions."