IDEAS home Printed from
MyIDEAS: Login to save this paper or follow this series

Culture, Entrepreneurship, and Growth

  • Matthias Doepke
  • Fabrizio Zilibotti

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:
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 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.

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

in new window

Date of creation: Jun 2013
Date of revision:
Publication status: published as Handbook of Economic Growth Volume 2, 2014, Pages 1–48 Handbook of Economic Growth Cover image Chapter 1 – Culture, Entrepreneurship, and Growth Matthias Doepke*, , Fabrizio Zilibotti†,
Handle: RePEc:nbr:nberwo:19141
Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Phone: 617-868-3900
Web page:

More information through EDIRC

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. Thomas Piketty, 1994. "Social Mobility and Redistributive Politics," Working papers 94-15, Massachusetts Institute of Technology (MIT), Department of Economics.
  2. Doepke, Matthias & Tertilt, Michèle & Voena, Alessandra, 2011. "The Economics and Politics of Women's Rights," IZA Discussion Papers 6215, Institute for the Study of Labor (IZA).
  3. Voigtländer, Nico & Voth, Hans-Joachim, 2011. "Persecution Perpetuated: The Medieval Origins of Anti-Semitic Violence in Nazi Germany," CEPR Discussion Papers 8365, C.E.P.R. Discussion Papers.
  4. 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.
  5. 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).
  6. Acemoglu, Daron & Ticchi, Davide & Vindigni, Andrea, 2009. "Persistence of Civil Wars," IZA Discussion Papers 4418, Institute for the Study of Labor (IZA).
  7. Dominic Rohner & Mathias Thoenig & Fabrizio Zilibotti, 2012. "Seeds of Distrust: Conflict in Uganda," HiCN Working Papers 112, Households in Conflict Network.
  8. Jesús Fernández-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," NBER Working Papers 15677, National Bureau of Economic Research, Inc.
  9. Matthias Doepke & Fabrizio Zilibotti, 2007. "Occupational Choice and the Spirit of Capitalism," SFB 649 Discussion Papers SFB649DP2007-049, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  10. 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.
  11. Fehr, Ernst & Hoff, Karla, 2011. "Tastes, Castes, and Culture: The Influence of Society on Preferences," IZA Discussion Papers 5919, Institute for the Study of Labor (IZA).
  12. 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.
  13. Matsuyama, Kiminori, 1996. "Growing Through Cycles," Economics Series 40, Institute for Advanced Studies.
  14. Esther Hauk & Maria Sáez, 1999. "On the cultural transmission of corruption," Economics Working Papers 392, Department of Economics and Business, Universitat Pompeu Fabra.
  15. Guido Tabellini, 2005. "Culture and Institutions: Economic Development in the Regions of Europe," CESifo Working Paper Series 1492, CESifo Group Munich.
  16. 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.
  17. 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.
  18. Raquel Fernandez & Alessandra Fogli, 2005. "Culture: An Empirical Investigation of Beliefs, Work, and Fertility," NBER Working Papers 11268, National Bureau of Economic Research, Inc.
  19. Daron Acemoglu & Alexander Wolitzky, 2012. "Cycles of Distrust: An Economic Model," NBER Working Papers 18257, National Bureau of Economic Research, Inc.
  20. 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.
  21. Laura Veldkamp & Alessandra Fogli, 2009. "Nature or Nurture? Learning and the Geography of Female Labor Force Participation," 2009 Meeting Papers 141, Society for Economic Dynamics.
  22. 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.
  23. 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.
  24. 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.
  25. 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.
  26. 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.
  27. 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.
  28. 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, vol. 46(1), pages 263-303, 02.
  29. Sutter, Matthias & Kocher, Martin G. & Rützler, Daniela & Trautmann, Stefan T., 2010. "Impatience and Uncertainty: Experimental Decisions Predict Adolecents' Field Behavior," Discussion Papers in Economics 12114, University of Munich, Department of Economics.
  30. Dominic Rohner & Mathias Thoenig & Fabrizio Zilibotti, 2013. "War Signals: A Theory of Trade, Trust, and Conflict," Review of Economic Studies, Oxford University Press, vol. 80(3), pages 1114-1147.
  31. 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).
  32. Oded Galor & Quamrul Ashraf, 2008. "Human Genetic Diversity and Comparative Economic Development," Working Papers 2008-3, Brown University, Department of Economics.
  33. Matthias Doepke & Fabrizio Zilibotti, 2014. "Parenting with style: altruism and paternalism in intergenerational preference transmission," UBSCENTER - Working Papers 008, UBS International Center of Economics in Society - Department of Economics - University of Zurich.
  34. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October.
  35. Sáez-Martí, Maria & Zenou, Yves, 2010. "Cultural Transmission and Discrimination," CEPR Discussion Papers 7622, C.E.P.R. Discussion Papers.
  36. Raquel Fernández & Alessandra Fogli, 2005. "Fertility: The Role of Culture and Family Experience," NBER Working Papers 11569, National Bureau of Economic Research, Inc.
  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. Guvenen, Fatih, 2006. "Reconciling conflicting evidence on the elasticity of intertemporal substitution: A macroeconomic perspective," Journal of Monetary Economics, Elsevier, vol. 53(7), pages 1451-1472, October.
  39. Galor, Oded & Michalopoulos, Stelios, 2012. "Evolution and the growth process: Natural selection of entrepreneurial traits," Journal of Economic Theory, Elsevier, vol. 147(2), pages 759-780.
  40. Assar Lindbeck & Sten Nyberg, 2001. "Raising Children to Work Hard: Altruism, Work Norms and Social Insurance," CESifo Working Paper Series 498, CESifo Group Munich.
  41. Philippe Aghion & Yann Algan & Pierre Cahuc & Andrei Shleifer, 2009. "Regulation and Distrust," NBER Working Papers 14648, National Bureau of Economic Research, Inc.
  42. Jean-Baptiste Michau, 2009. "Unemployment Insurance and Cultural Transmission: Theory and Application to European Unemployment," CEP Discussion Papers dp0936, Centre for Economic Performance, LSE.
  43. 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.
  44. Heckman, James J., 2000. "Policies to foster human capital," Research in Economics, Elsevier, vol. 54(1), pages 3-56, March.
  45. N. Lesca, 2011. "Introduction," Post-Print halshs-00640604, HAL.
  46. Becker, Sascha O. & Wößmann, Ludger, 2007. "Was Weber Wrong? A Human Capital Theory of Protestant Economic History," Discussion Papers in Economics 1366, University of Munich, Department of Economics.
  47. Kamhon Kan & Wei-Der Tsai, 2006. "Entrepreneurship and Risk Aversion," Small Business Economics, Springer, vol. 26(5), pages 465-474, 06.
  48. Zumbühl M.A. & Pfann G.A. & Dohmen T.J. & Pfann G.A., 2013. "Parental investment and the intergenerational transmission of economic preferences and attitudes," Research Memorandum 033, Maastricht University, Graduate School of Business and Economics (GSBE).
  49. Lutz Hendricks, 2005. "How Important is Discount Rate Heterogeneity for Wealth Inequality?," CESifo Working Paper Series 1604, CESifo Group Munich.
  50. Alesina, Alberto & Giuliano, Paola, 2009. "Preferences for Redistribution," IZA Discussion Papers 4056, Institute for the Study of Labor (IZA).
  51. Botticini, Maristella & Eckstein, Zvi, 2004. "Jewish Occupational Selection: Education, Restrictions or Minorities?," CEPR Discussion Papers 4604, C.E.P.R. Discussion Papers.
  52. Gorodnichenko, Yuriy & Roland, Gerald, 2010. "Culture, Institutions and the Wealth of Nations," IZA Discussion Papers 5187, Institute for the Study of Labor (IZA).
  53. Mariacristina Nardi, 2004. "Wealth Inequality and Intergenerational Links," Review of Economic Studies, Wiley Blackwell, vol. 71, pages 743-768, 07.
  54. Ashraf, Quamrul & Galor, Oded, 2011. "The 'Out of Africa' Hypothesis, Human Genetic Diversity, and Comparative Economic Development," CEPR Discussion Papers 8500, C.E.P.R. Discussion Papers.
  55. McCleary, Rachel & Barro, Robert, 2003. "Religion and Economic Growth across Countries," Scholarly Articles 3708464, Harvard University Department of Economics.
  56. Hugo A. Hopenhayn & Galina Vereshchagina, 2003. "Risk Taking by Entrepreneurs," RCER Working Papers 500, University of Rochester - Center for Economic Research (RCER).
  57. 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.
  58. Sáez-Martí, María & Sjögren, Anna, 2005. "Peers and Culture," Working Paper Series 642, Research Institute of Industrial Economics.
  59. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth Through Creative Destruction," Scholarly Articles 12490578, Harvard University Department of Economics.
  60. Yann Algan & Pierre Cahuc, 2013. "Trust and Growth," Annual Review of Economics, Annual Reviews, vol. 5(1), pages 521-549, 05.
  61. 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.
  62. Carneiro, Pedro & Heckman, James J., 2003. "Human Capital Policy," IZA Discussion Papers 821, Institute for the Study of Labor (IZA).
  63. Marco Cozzi, 2012. "Risk Aversion Heterogeneity, Risky Jobs and Wealth Inequality," Working Papers 1286, Queen's University, Department of Economics.
  64. 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.
  65. Algan, Yann & Cahuc, Pierre & Sangnier, Marc, 2014. "Trust and the Welfare State: the Twin Peaks Curve," CEPR Discussion Papers 10061, C.E.P.R. Discussion Papers.
  66. 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.
  67. Guiso, Luigi & Sapienza, Paola & Zingales, Luigi, 2002. "People's Opium? Religion and Economic Attitudes," CEPR Discussion Papers 3588, C.E.P.R. Discussion Papers.
  68. Galor, Oded & Moav, Omer, 2000. "Natural Selection and the Origin of Economic Growth," Arbetsrapport 2000:5, Institute for Futures Studies.
  69. 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.
  70. 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.
  71. Sáez-Martí, Maria & Zenou, Yves, 2011. "Cultural Transmission, Discrimination and Peer Effects," Research Papers in Economics 2011:3, Stockholm University, Department of Economics.
  72. 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.
  73. Kate Krause & Lise Vesterlund & William Harbaugh, 2002. "Risk attitudes of children and adults: Choices over small and large probability gains and losses," Artefactual Field Experiments 00055, The Field Experiments Website.
  74. Paola Giuliano, 2007. "Living Arrangements in Western Europe: Does Cultural Origin Matter?," Journal of the European Economic Association, MIT Press, vol. 5(5), pages 927-952, 09.
  75. 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.
  76. Baudin, Thomas, 2010. "A Role For Cultural Transmission In Fertility Transitions," Macroeconomic Dynamics, Cambridge University Press, vol. 14(04), pages 454-481, September.
  77. 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.
  78. 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.
  79. 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.
  80. 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.
  81. Glenn W. Harrison & Morten I. Lau & Melonie B. Williams, 2002. "Estimating Individual Discount Rates in Denmark: A Field Experiment," American Economic Review, American Economic Association, vol. 92(5), pages 1606-1617, December.
  82. 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.
  83. 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.
  84. Philippe Aghion & Yann Algan & Pierre Cahuc, 2011. "Civil Society And The State: The Interplay Between Cooperation And Minimum Wage Regulation," Journal of the European Economic Association, European Economic Association, vol. 9(1), pages 3-42, 02.
  85. 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.
  86. Samuel Bowles & Herbert Gintis, 2002. "The Inheritance of Inequality," Journal of Economic Perspectives, American Economic Association, vol. 16(3), pages 3-30, Summer.
  87. Bisin, Alberto & Verdier, Thierry, 2001. "The Economics of Cultural Transmission and the Dynamics of Preferences," Journal of Economic Theory, Elsevier, vol. 97(2), pages 298-319, April.
  88. 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.
  89. Maristella Botticini & Zvi Eckstein, 2006. "Path Dependence and Occupations," Carlo Alberto Notebooks 3, Collegio Carlo Alberto.
  90. Yann Algan & Pierre Cahuc & Marc Sangnier, 2011. "Efficient and Inefficient Welfare States," Sciences Po publications 5445, Sciences Po.
  91. 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.
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: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.

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