The power of the family

Abstract

We study the importance of family ties on economic behavior. We define our measure of family ties using individual responses from the World Value Survey (WVS) regarding the role of the family and the love and respect that children are expected to have for their parents in 81 countries. We show that with strong family ties home production is higher and families larger, labor force participation of women and youngsters, and geographical mobility lower. To assess causality, we look at the behavior of second generation immigrants. Our results overall indicate a significant influence of the strength of family ties on economic outcomes.

The ‘Bright’ Side of Social Capital: How ‘Bridging’ Makes Italian Provinces More Innovative

“…So far, there has been no conclusive empirical evidence supporting Banfield's hypothesis, but, some recent research provides support to this view. Alesina and Giuliano (2010) find that strong family ties are associated with low levels of generalized trust. Similarly, Giavazzi et al (2010) relate family types to female labour market participation rate in European regions, whereas Duranton et al (2009) relate past family structures to a number of contemporary outcomes: they all concur in suggesting the existence of a strong link between 'close' family ties and an inward orientation/networking of local societies.…”

“…Strong family ties imply geographical proximity of adult children: young adults tend to stay longer with their parents and relationships within families are particularly strong and based on repeated interactions (Alesina and Giuliano, 2010).…”

Should I stay or should I go? Sibling effects in household formation

“…For our identi…cation strategy to be meaningful, we …rst need the subsidy to be e¤ective in promoting household formation in the sample of siblings. To check this we estimate the following speci…cation by OLS: y j;t = 0 + 1 t t + 2 e j + 3 e j t t + 4 X j;t + 5 X i;t + i;j + " jt (2) where the coe¢ cient 3 captures the e¤ect of the sibling being eligible for the subsidy on the probability that the sibling forms a household.…”

“…1 Moreover, this proportion has increased sharply in Southern Europe during the last three decades. 2 Policy makers are concerned about young adults late household formation because it may critically a¤ect family formation decisions, overall fertility rates, youth labour supply, labour mobility, and the sustainability of pay-as-you-go pension systems. As a consequence, several governments have implemented measures or advocated the need for incentives to promote household formation (for instance, the Portuguese "Porta 65" program in 2007, the Spanish "Renta Basica di Emancipacion" in 2008, and the French "Aide Mobili-Jeune" in 2013).…”

“…Source: Eurostat, EU-SILC. 2 Angelini and Laferrere (2013) show that both cultural traits and the parental ability to help their children by either providing them with a home, or with a …nancial transfer to move out, a¤ected the nest living patterns over time and across European countries. For an analysis on the heterogeneity of parental altruism across countries see Horioka (2014).…”