16727_family...11.07.11_000010972402XSmall

GDP: Family Matters

Jun 20, 2013 • Behavioral Economics, Developing Economies, Economic Growth, Gender Issues, Households, Innovation, Labor, Macroeconomic Measurement • 302 Views    No Comments

Recently, a woman who had emigrated to the US told me that speaking English was prohibited in her NYC home. She allowed only Spanish. “Why,” I asked? Proudly she said, “The importance of family.”

Wondering if her decision would impact her children’s economic success, I (sort of) got an answer from Freakonomics and a 2013 academic paper, “Family Ties.”

Through “Family Ties,” economists Alberto Alesina and Paulo Giuliano tried to show how stronger family ties affect economic activity. They started by explaining the variables that constituted a close family relationship:

  • the importance of family in a person’s life
  • the duties and responsibilities of parents and children
  • respect for parents

In the following world map, you can see they concluded that the Nordic nations and Germany have weaker family connections while Southern Europe (except Greece) and Latin America are at the other extreme. The US is somewhere in the middle.

The darker the blue, the stronger the ties. From "Family Ties," Alesina and Giuliano, April, 2013

The darker the blue, the stronger the ties. From “Family Ties,” Alesina and Giuliano, April, 2013.

Next, knowing which countries have stronger family ties, they looked at attitudes in these countries toward political institutions, trust, women, and the workplace. Their conclusions? Stronger family ties meant less political participation and less trust in people and institutions beyond the home. Insular families had a traditional outlook, less worker mobility and less willingness to innovate.

Moving beyond family, the authors of the study then identified a more resounding “family ties” impact. They concluded that lack of interest in political participation correlated with “lower quality institutions.” The result was diminished rule of law, diluted property rights and less freedom of speech.

You can see where this is going.

Less family interest in the workplace, emphasis on tradition rather than innovation, and distrust of people and institutions beyond the family correlate with lower real per capita GDP and productivity. Also though, strong family ties correspond to higher levels of well-being and happiness.

Interesting.

I know I have not definitively answered my question about prohibiting English in an immigrant household. But “Family Ties” provides some clues.

Sources and resources: Hat tip to Freakonomics for their link to “Family Ties” by Alberto Alesina and Paola Giuliano in a very interesting podcast. And here is the World Values Survey if you would like to see a wealth of data on “Political and Sociocultural Change.”

Related Posts

« »