Family Characteristics and Economic Development
44 Pages Posted: 18 Oct 2014 Last revised: 29 Oct 2016
Date Written: October 28, 2016
This paper links economic development to age-old family characteristics through the propensity to invest and then, increase human productivity. Three family characteristics are identified as supporting investment. Inequality among siblings favors investment in physical capital whereas a high status of women and strong parental authority favor investment in human capital. To test this theory, we rely on Todd’s classification of traditional family types observed around the world. A family score is built according to the presence of these three characteristics in the family type of each country. This family score as well as basic characteristics are significantly associated with better economic outcomes (GDP per capita as well as proxies for investments in human and physical capital). These relationships are robust to other factors already identified as playing a role, such as geography, ethnic fractionalization, genetic diversity, religion and formal institutions. Reverse causality is rejected by historical anthropology. Family characteristics supporting modern development are actually the most primitives only preserved in the margins of Eurasia. The higher the distance from the two centers of innovations (Fertile Crescent and China), the more primitive are the family characteristics of a country reflected in a higher family score. This allows an instrumental investigation which confirms our results.
Keywords: Economic development, Family model, Cultural Economics, Reversal of fortune
JEL Classification: N10, N30, N50, O10, O50, Z10
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