The purpose of the paper is to examine how much difference in income can be explained by familial culture that persists in different societies.
We employ a two-step methodology to evaluate the impact of familial culture on income across countries. In the first step, we construct the macro measures of familial culture from micro survey data. In the second step, the growth model is estimated.
First-step micro regression results show that family is more important to female, richer, highly educated, unemployed and married individuals. Male, poorer, less educated and unemployed individuals are more likely to respect and love parents unconditionally. The same group is also more likely to think that parents must do the best for their kids. Finally, the macro results show that the strength of national familial ties explains significant differences in income across countries.
We show that countries with weak family ties are richer than those with strong family ties. These results are useful for policymakers who design public policies that accommodate the type of familial culture that persists in their society.
We construct the macro measures of familial culture from the micro survey data. The paper adds to the literature on the effect of culture on income at the macro level.
