Cultural Values and Productivity

Andreas Ek

Journal of Political Economy, 2024, vol. 132, issue 1, 295 - 335

Abstract: This paper estimates differences in human capital as country-of-origin-specific labor productivity terms in firm production functions, making it immune to wage discrimination concerns. After accounting for education and experience, estimated human capital varies by a factor of around three between the 90th and the 10th percentile. When I investigate which country-of-origin characteristics most closely correlate with human capital, cultural values are the only robust predictor. This relationship persists among children of migrants. Consistent with a plausible cultural mechanism, individuals whose origin places a high value on autonomy hold a comparative advantage in positions characterized by a low degree of routinization.

Date: 2024
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