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From Family Culture to Welfare State Design

Vincenzo Galasso () and Paola Profeta ()

No 14, CHILD Working Papers Series from Centre for Household, Income, Labour and Demographic Economics (CHILD) - CCA

Abstract: We study how family culture affected the initial welfare state design. Our theoretical framework shows that pre-existing institutions — namely inheritance rules — shaped the within family intergenerational transmission of resources. This organization is embedded in the family culture that later affected the design of pension systems. Countries with equalitarian inheritance rules acquired a non-individualistic family culture that induced the adoption of generous Bismarckian pension systems, whereas non-equalitarian inheritance rules nurtured family independence and led to Beveridgean (safety net) pension systems. Cross countries analyses using historical inheritance rules support these predictions, and results are robust to controlling for alternative legal, religious, demographic, economic and political explanations. Evidence from individual data confirm these findings: US citizens whose ancestors came from countries featuring equal inheritance rules prefer to rely on the government as a provider of old age security through generous retirement benefits.

Keywords: culture; inheritance rules, pension design. JEL Classifications: Z10; Z13; N30; H10; H55. (search for similar items in EconPapers)
Pages: 60 pages
Date: 2013
New Economics Papers: this item is included in nep-age and nep-dem
References: View references in EconPapers View complete reference list from CitEc
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