Eric Hanushek, Lavinia Kinne, Philipp Lergetporer, Ludger Woessmann, 02 August 2020

Differences in student achievement are strongly related to both future individual earnings and national economic growth. Cultural traits that underlie intertemporal decision-making may affect how much students learn. Using data for close to two million students across 49 countries during 2000–2018, this column looks at levels of patience and risk-taking and its effect on student performance. A positive effect of patience and a negative effect of risk-taking can account for two-thirds of the cross-country variation in student achievement. Among migrant students, patience and risk-taking levels of the students’ countries of origin had remarkably similar effects on educational performance in the host country.

Felix Kersting, Iris Wohnsiedler, Nikolaus Wolf, 11 July 2020

Max Weber famously hypothesised that the Protestant work ethic fostered modern economic development. Does religion matter for economic success? This column revisits Weber’s hypothesis in the context of 19th-century Prussia. Protestantism did not matter for savings, literacy rates, or income levels across Prussian counties after 1870. Instead, there are large differences between ethnic groups, likely due to ethnic discrimination. Nationalism must be taken into account to understand Weber’s writings.

Jean-Philippe Platteau, Vincenzo Verardi, 16 May 2020

One puzzle that arises in connection with the spread of Covid-19 is why there is such large variation in infection and death rates both across as well as within countries. This column argues that differences in the way people, and in particular different age groups, interact can explain part of this variation. Simulations show that the measures Belgium would need to take when re-opening its economy would be more moderate if it had the same interaction patterns as Germany, and more strict if it had Italy’s interaction patterns. A key lesson is that there is no one-size-fits-all solution that could be applied to all countries, or even to all regions within a country.

Paola Sapienza, 06 March 2020

Paola Sapienza argues that immigrants are particularly good proof of certain cultural aspects, because they may live in economic conditions that are very different from their country of origin. 

Josef Zweimüller, 28 February 2020

Can differences in culture and attitudes towards work explain differences in unemployment across time and space?

Stephanie Bergbauer, Jean-Francois Jamet, Hanni Schölermann, Livio Stracca, Carina Stubenrauch, 20 September 2019

Recent successes of populist movements in Europe might seem to reflect eroded trust in the EU’s institutions. This column asks what global lessons can be drawn from recent research on Euroscepticism at the ECB and elsewhere. It argues that taking citizens’ concerns seriously and addressing salient issues, building on a sense of togetherness, and caring about public trust should inspire a course of action at the global level. Insufficient progress along these dimensions has played a key role not only in Brexit, but also in the backlash against the multilateral world order underpinning globalisation.

Katharina Erhardt, Simon Haenni, 27 May 2019

Firm entry is widely viewed as a central driver of economic growth, so understanding the role of culture in explaining differences in entrepreneurial activity is important. Using Swiss data on individuals’ cultural origins going back to the 18th century, this column compares the entrepreneurial activity of individuals who live in the same municipalities but who have their cultural origins on different sides of the language border. It finds that individuals with ancestry from the German-speaking side founded 20% more firms than those with ancestry from the French-speaking side. Yet, the cultural origin of the founder does not affect firm-level outcomes such as bankruptcy or revenues.  

Oded Galor, Ömer Özak, Assaf Sarid, 20 January 2019

Evidence suggests that ancient regional variations in geographical characteristics contributed to the differential formation of culturaland linguistic traits, which in turn shaped development and inequality in today’s world. This column discusses how geographical characteristics are linked to the emergence of long-term orientation and the future tense, how they shaped distinct gender roles and possibly contributed to the emergence of grammatical gender, and how ecological diversity is connected to the emergence of hierarchical societies and reflected in politeness distinctions in language.

Joan Costa-Font, Paola Giuliano, Berkay Ozcan, 30 September 2018

Previous studies have shown that saving rates are influenced by, among other things, demographics and income, but much of the difference in saving rates across societies remains unexplained. This column uses data covering three generations of immigrants in the UK to demonstrate that culture is an important explanation for cross-country differences in saving behaviour. When designing incentives to save, culture should therefore be taken into account.

Armin Falk, Anke Becker, Thomas Dohmen, Benjamin Enke, David Huffman, Uwe Sunde, 19 June 2018

Vast inequalities exist within societies as well as across nations. This column uses a new dataset to show that preferences vary substantially across and within societies, and that these differences are related to differences in economic outcomes at the individual and aggregate levels. The findings suggest that institutional reform should take into account how institutions may interact with preference differences. 

Alison Booth, 11 May 2018

Recent research has suggested that an element of the gender wage gap can be explained by differences between men and women in their competitiveness and risk-taking. Using evidence from post-Cultural Revolution Beijing and Taipei, Alison Booth discusses her work on the extent to which these differences can be explained by the culture in which people grow up. This video was recorded at the 2018 RES annual conference.

Simeon Djankov, Elena Nikolova, 26 April 2018

While the existing scholarship has explained long-run institutional development across countries with a variety of different factors, the literature remains largely silent on the role of religion. Using survey data, this column shows that deep-rooted theological differences between Orthodoxy, and Catholicism and Protestantism affect life satisfaction and other attitudes and values in large parts of Europe today. Although totalitarian governments suppressed religious activities, they preserved those aspects of Orthodoxy – such as tradition and communitarianism – which were helpful for advancing the communist doctrine.

Thomas Andersen, Jeanet Bentzen, Carl-Johan Dalgaard, Paul Sharp, 23 October 2017

Examples of the interaction of religious influence and economic performance have occurred throughout history, most notable Weber’s argument of the ‘Protestant ethic’. This column uses an earlier example, of the Cistercian Catholic Order, to show that religious values did influence productivity and economic performance in England and across Europe. The effect of this historic influence has persisted to today.

Dalia Marin, Linda Fache Rousová, Thierry Verdier, 21 September 2016

We know little detail about how much multinational firms transplant their organisational culture to affiliates. Data from Austrian and German multinational firms shows that, contrary to what we might expect, almost 70% of foreign investments do not adopt the parent firm's mode of organisation. This column argues that the size of the home and host markets, and the level of competition in each market, all influence the decision to transplant culture. Globalisation also creates 'reverse transplanting', in which the parent firm's organisation becomes more like the optimal organisation of the subsidiary. 

Klaus Desmet, Ignacio Ortuño-Ortin, Romain Wacziarg, 31 July 2016

The current refugee crisis has highlighted the importance of understanding how ethnic and cultural differences affect social cohesion. This column investigates the links between ethnicity and culture, and the relationship between diversity and civil conflict. It finds that globally, there appears to be little overlap between ethnic identity and cultural identity. Also, ethnic diversity per se has no effect on civil conflict. It is when differences in culture coincide with differences in ethnicity that conflict becomes more likely.

Jakob de Haan, Wijnand Nuijts, Mirea Raaijmakers, 06 November 2015

The Global Crisis revealed serious deficiencies in the supervision of financial institutions. In particular, regulators neglected organisational culture at the institutional level. This column reviews efforts since 2011 by De Nederlandsche Bank to oversee executive behaviour and cultures at financial institutions. These measures aimed at identifying risky behaviour and decision-making processes at a sufficiently early stage for appropriate countermeasures to be implemented. The findings show that regulators can play a larger part in securing the stability of the financial system by taking an active role in shaping institutional cultural processes.

Simone Moriconi, Giovanni Peri, 19 October 2015

Unemployment rates vary widely across EU countries. While national institutions and policies explain much of the variation, cultural values, attitudes, and beliefs may also play a role. This column uses survey data from 26 EU countries to investigate the existence of culturally transmitted preferences for work. Country-specific preferences for work are found to have a positive effect on emigrants’ labour market outcomes, with those from countries with an above-average preference for work having higher employment rates abroad. Cultural preferences are significant enough that EU countries may never converge to the same employment rate.

Enrico Spolaore, Romain Wacziarg, 27 June 2015

Cultural transmission occurs both vertically – from one generation to the next – and, increasingly in modern times, horizontally – within generations and across populations. Using novel data for 74 countries, this column explores how genetic relatedness between populations affects the transmission of cultural traits. A pattern of positive and significant relationships is found between genetic distance and various measures of cultural distance, including language, religion, values, and norms. This implies that populations that are ancestrally closer face lower barriers to learning new ideas and behaviours from each other.

Esther Hauk, Giovanni Immordino, 16 October 2014

Given a large body of evidence that television influences cultural attitudes, the fear that foreign content erodes local culture may be justified. Such reasoning is often cited in support of the cultural exception that the audiovisual industry routinely receives. This column introduces an economic model of cultural transmission and viewer choice to argue that a competitive TV industry is the best way to ensure cultural survival.

Patricia Jackson, 13 October 2014

Following the Global Crisis the focus has been on how to make banks safer. Capital and liquidity requirements have been tightened, but attention now needs to shift to corporate governance and risk culture. This column argues that in opaque organisations, formal risk-appetite frameworks can provide a pre-commitment mechanism that tightens risk governance, but a focus on the wider risk culture is also important.

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