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Essays on the economics of culture

Ek, Andreas K. H. (2019) Essays on the economics of culture. PhD thesis, The London School of Economics and Political Science (LSE).

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Abstract

I present a thesis in three chapters on human capital, labor supply, and their relationship with cultural values. Chapter 1 and 2 contribute, respectively, to the questions of what share of income differences across countries that can be attributed to human capital, and on what determines differences in human capital. They rely on unique Swedish employer-employee linked administrative data to estimate differences in human capital as country-of-origin specific labor productivity terms in firm production functions. Unlike previous migrant-based measures in the literature, this is immune to concerns related to wage discrimination and robust to other varieties of discrimination. After accounting for education and experience, estimated human capital still varies by a factor of 3 between the countries at the 90th and 10th percentile of the human-capital distribution. When I investigate which country-of-origin characteristics most closely correlate with my estimates of human capital, cultural values elicited from the World Values Survey are the only robust predictor. This relationship persists among the children of migrants, which lends further credence to the cultural interpretation of human-capital differences unexplained by education and experience. Chapter 3 documents substantial cross-sectional variation in labor supply across countries, after taking into account differences in tax rates and real wages. When investigating which country characteristics that best explain the variation, I find that a cultural measure of preferences for leisure exerts an economically larger and statistically more robust influence than do traditional measures of labor market frictions. Micro-level labor supply choices of descendants of immigrants in the United States and Sweden buttress the cultural interpretation, that part of differences in labor supply can be attributed to differences in preferences. As an “out of sample” test, the paper looks at the implication of differences in preferences for cross-country differences in labor taxation. Economic theory suggests a negative association between preferences for leisure and labor taxes; empirical data verify the theoretical prediction.

Item Type: Thesis (PhD)
Additional Information: © 2019 Andreas K. H. Ek
Library of Congress subject classification: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HD Industries. Land use. Labor
Sets: Departments > Economics
Supervisor: Caselli, Francesco
URI: http://etheses.lse.ac.uk/id/eprint/3936

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