nep-evo New Economics Papers
on Evolutionary Economics
Issue of 2017‒05‒07
seven papers chosen by
Matthew Baker
City University of New York

  1. The Cultural Transmission of Trust Norms: Evidence from a Lab in the Field on a Natural Experiment By Jared Rubin; Elira Karaja
  2. The Love for Children Hypothesis and the Multiplicity of Fertility Rates By Paolo Melindi Ghidi; Thomas Seegmuller
  3. Unreal Wages? Real Income and Economic Growth in England, 1260-1850 By Humphries, Jane; Weisdorf, Jacob
  4. Are Individualistic Societies Less Equal? Evidence from the Parasite Stress Theory of Values By Nikolaev, Boris; Boudreaux, Christopher; Salahodjaev, Raufhon
  5. Institutions & Well-being By Bennett, Daniel; Nikolaev, Boris; Aidt, Toke
  6. Spatial Competition, Innovation and Institutions: The Industrial Revolution and the Great Divergence By Desmet, Klaus; Greif, Avner; Parente, Stephen L.
  7. Agricultural Returns to Labor and the Origins of Work Ethics By Fouka, Vasiliki; Schlaepfer, Alain

  1. By: Jared Rubin (Chapman University); Elira Karaja (World Bank and Harriman Institute at Columbia University)
    Abstract: We conduct trust games in three villages in a northeastern Romanian commune. From 1775-1919, these villages were arbitrarily assigned to opposite sides of the Habsburg and Ottoman/Russian border despite being located seven kilometers apart. Russian and Ottoman Öscal institutions were more rapacious than Habsburg institutions, which may have eroded trust of outsiders (relative to co-villagers). Our design permits us to rigorously test this conjecture, and more generally, whether historically institutionalized cultural norms are transmitted intergenerationally. We Önd that participants on the Ottoman/Russian side are indeed less likely to trust outsiders but more likely to trust co-villagers.
    Keywords: trust, trust game, culture, cultural transmission, natural experiment, Öeld experiment, laboratory experiment, norms, Romania, Austria, Ottoman Empire, Habsburg Empire
    JEL: C91 C93 N33 O17 Z1
    Date: 2017
  2. By: Paolo Melindi Ghidi (BETA, University of Strasbourg); Thomas Seegmuller (Aix-Marseille Univ. (Aix-Marseille School of Economics), CNRS, EHESS and Centrale Marseille)
    Abstract: As illustrated by some French departments, how can we explain the existence of equilibria with different fertility and growth rates in economies with the same fundamentals, preferences, technologies and initial conditions? To answer this question we develop an endogenous growth model with altruism and love for children. We show that independently from the type of altruism, a multiplicity of equilibria might emerge if the degree of love for children is high enough. We refer to this condition as the love for children hypothesis. Then, the fertility rate is determined by expectations on the future growth rate and the dynamics are not path-dependent. Our model is able to reproduce different fertility behaviours in a context of completed demographic transition independently from fundamentals, preferences, technologies and initial conditions.
    Keywords: fertility, love for children, expectations, endogenous growth, balanced growth path
    JEL: J13 O41 D11
    Date: 2017–03
  3. By: Humphries, Jane; Weisdorf, Jacob
    Abstract: Existing accounts of workers' earnings in the past suffer from the fundamental problem that annual incomes are inferred from day wages without knowing the length of the working year. We circumvent this problem by presenting a novel income series for male workers employed on annual contracts. We use evidence of labour market arbitrage to argue that existing estimates of annual incomes in England are badly off target, because they overestimate the medieval working year but underestimate the working year during the industrial revolution. Our revised income estimates suggests that modern economic growth began more than two centuries earlier than commonly thought and was driven by an early and continuing "Industrious Revolution".
    Keywords: England; Industrial Revolution; Industrious Revolution; Labour Supply; Living standards; Malthusian Model; Real Wages
    JEL: J3 J4 J5 J6 J7 J8 N33
    Date: 2017–04
  4. By: Nikolaev, Boris; Boudreaux, Christopher; Salahodjaev, Raufhon
    Abstract: It is widely believed that individualistic societies, which emphasize personal freedom, award social status for accomplishment, and favor minimal government intervention, are more prone to higher levels of income inequality compared to more collectivist societies, which value conformity, loyalty, and tradition and favor more interventionist policies. The results in this paper, however, challenge this conventional view. Drawing on a rich literature in biology and evolutionary psychology, we test the provocative Parasite Stress Theory of Values, which suggests a possible link between the historical prevalence of infectious diseases, the cultural dimension of individualism-collectivism and differences in income inequality across countries. Specifically, in a two-stage least squares analysis, we use the historical prevalence of infectious diseases as an instrument for individualistic values, which, in the next stage, predict the level of income inequality, measured by the net GINI coefficient from the Standardized World Income Inequality Database (SWIID). Our findings suggest that societies with more individualistic values have significantly lower net income inequality. The results are robust even after controlling for a number of confounding factors such as economic development, legal origins, religion, human capital, other cultural values, economic institutions, and geographical controls.
    Keywords: Inequality, Individualism-Collectivism, Two-Stage Least Squares
    JEL: D63 O1 O17
    Date: 2017
  5. By: Bennett, Daniel; Nikolaev, Boris; Aidt, Toke
    Abstract: It is by now well-established in the development economics literature that institutions play a vital role in shaping social, economic, and political incentives, reducing transaction costs and uncertainty, and promoting long-run economic growth. Following recent developments on the measurement of socio-economic progress, which emphasize the importance of many non-economic dimensions of quality of life, the goal of this special issue is to encourage new socio-economic research on the relationship between institutions and well-being in this broader sense. Here, we provide a brief overview of the existing literature on institutions and well-being and then summarize the papers in this special issue according to three unifying themes (1) economic freedom studies; (2) institutions and long-run growth, and (3) well-being and institutions in transition economies. We conclude by discussing some challenges for future research.
    Keywords: institutions, well-being, development
    JEL: O10 O17 P5
    Date: 2016–12
  6. By: Desmet, Klaus; Greif, Avner; Parente, Stephen L.
    Abstract: Why do some countries industrialize much earlier than others? One widely-accepted answer is that markets need to be large enough for producers to find it profitable to bear the fixed cost of introducing modern technologies. This insight, however, has limited explanatory power, as illustrated by England having industrialized nearly two centuries before China. This paper argues that a market-size-only theory is insufficient because it ignores that many of the modern technologies associated with the Industrial Revolution were fiercely resisted by skilled craftsmen who expected a reduction in earnings. Once we take into account the incentives to resist by factor suppliers' organizations such as craft guilds, we theoretically show that industrialization no longer depends on market size, but on the degree of spatial competition between the guilds' jurisdictions. We substantiate the relevance of our theory for the timing of industrialization in England and China (i) by providing historical and empirical evidence on the relation between spatial competition, craft guilds and innovation, and (ii) by showing that a model of our theory calibrated to historical data on spatial competition correctly predicts the timing of industrialization in both countries. The theory can therefore account for both the Industrial Revolution and the Great Divergence.
    Keywords: adoption of technology; craft guilds; endogenous institutions; Great Divergence; industrial revolution; innovation; inter-city competition; market size; spatial competition
    JEL: N10 O11 O14 O31 O43
    Date: 2017–04
  7. By: Fouka, Vasiliki; Schlaepfer, Alain
    Abstract: We examine the historical determinants of differences in preferences for work across societies today. Our hypothesis is that a society’s work ethic depends on the role that labor has played in it historically, as an input in agricultural production: societies that have for centuries depended on the cultivation of crops with high returns to labor effort will work longer hours and develop a preference for working hard. We formalize this prediction in the context of a model of endogenous preference formation, with altruistic parents that can invest in reducing their offsprings’ disutility from work. To empirically found our model, we construct an index of potential agricultural labor intensity, that captures the suitability of a location for the cultivation of crops with high estimated returns to labor in their production. We find that this index positively predicts work hours and attitudes towards work in contemporary European regions. We find support for the hypothesis of cultural transmission, by examining the correlation between potential labor intensity in the parents’ country of origin and hours worked by children of European immigrants in the US.
    Keywords: Agriculture, Labor Productivity, Hours of Work, Culture
    JEL: J22 J24 N30 N50 Z10
    Date: 2017–03

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