The power of the family

J Econ Growth (2010) 15:93125 DOI 10.1007/s10887-010-9052-z

The power of the family

Alberto Alesina Paola Giuliano

Published online: 27 May 2010 The Author(s) 2010. This article is published with open access at Springerlink.com

Abstract We study the importance of family ties on economic behavior. We dene 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 inuence of the strength of family ties on economic outcomes.

Keywords Family ties Culture Immigrants

JEL Classication Z10 Z13

1 Introduction

The strength of family ties varies across cultures and it matters for economic decisions. In this paper we document that the strength of family ties determines, via the organization of the family, the amount of home production, the division of labor of men and women between market activities and home activities, and the participation of women in the labor force as a

A. AlesinaHarvard University, Cambridge, MA, USA

A. AlesinaIGIER, Bocconi University, Milan, Italy

P. Giuliano (B)

UCLA Anderson School of Management, Los Angeles, CA, USA

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94 J Econ Growth (2010) 15:93125

result.1 Strong family ties require a member of the family (typically the wife) to stay more at home to run the family organization, the role of women is therefore more traditional (by this term we identify the view of stay at home wives and mothers.) Also strong family ties imply geographical proximity of adult children: young adults stay home longer with strong family ties and when they exit the parental household they tend to stay close to enjoy the benets of the family, both emotional and practical (grandparents services as baby sitters for instance). Geographical mobility is important because it inuences the quality of matches between jobs and applicants; it also inuences investment in human capital, related to the type of activities available in a certain area. If youngsters stay close to home the match...