We study the e¤ect of culture on important economic outcomes by using the 1970 Census to examine the work and fertility behavior of women 30-40 years old, born in the U.S., but whose parents were born elsewhere. We use past female labor force participation and total fertility rates from the country of ancestry as our cultural proxies. These variables should capture, in addition to past economic and institutional conditions, the beliefs commonly held about the role of women in society, i.e. culture. Given the di¤erent time and place, only the beliefs embodied in the cultural proxies should be potentially relevant to women's behavior in the US in 1970. We show that these cultural proxies have positive and signi…cant explanatory power for individual work and fertility outcomes, even after controlling for possible indirect e¤ects of culture (e.g., education and spousal characteristics). We examine alternative hypotheses for these positive correlations and show that neither unobserved human capital nor networks are likely to be responsible. We also show that the e¤ect of these cultural proxies is ampli…ed the greater is the tendency for ethnic groups to cluster in the same neighborhoods. JEL Nos.: J13, J21, Z10.

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P-60 series, and the U.S. Census among others) to calculate earnings for men and women. 60 As there is no data for earnings in 1880 and 1910, these points are constructed using a cubic approximation with the data from 1890 -1930 (inclusive).To construct the earnings sample from 1940 onwards I used the 1% IPUMS samples of the U.S. Census for yearly earnings (incwage) to calculate the median earnings of white 25-44 years old men and women who were working full time (35 or more hours a week) andyear round (40 or more weeks a year) and were in non-farm occupations and not in group quarters. 61 As is commonly done, observations that report weekly earnings less than a cutoff are excluded. 62 Prior to 1980, individuals report earnings from the previous year, weeks 60 See Goldin (1990) pages 64-65 and 129 for greater detail about the earnings construction for various years. I use the data for white men and women. 61 The sample is limited to full-time year-round workers because hourly wages are not reported. The sample could have been restricted to include only married men and women, but I chose not to do this in order to be consistent with the data from the earlier time period.62 The latter is calculated as half the nominal minimum wage times 35 hours a week and nominal weekly wages are calculated by dividing total wage and salary income last year by weeks worked last year. See, for example, Katz and Autor (1999). This procedure is somewhat more problematic for the decades 1940-1960, when the federal minimum wage did not apply to all workers (prior to the 1961 amendment, it only affected those involved in interstate commerce). Nonetheless, I use the same cutoff rule as in Goldin and Margo (1992) as a way to eliminate unreasonably low wages. Note that by calculating median earnings, I do not have to concern myself with top-coding in the Census.

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This paper discusses some recent advances in the area of culture and economics and examines the effect of culture on a key economic outcome: female labor supply. To separate the effect of market variables and institutions from culture, I use an epidemiological approach, studying second-generation American women. I use both female labor force participation (LFP) and attitudes in the women's country of ancestry as cultural proxies and show that both cultural proxies have quantitatively significant effects on women's work outcomes. The paper concludes with some suggestions for future empirical and theoretical research topics in this area. (JEL: J13, J21, Z10)