Economists have been increasingly looking at culture to explain the divergent economic fortunes of nations. Does culture matter for development? If it does, what kind of culture? In a recent paper we argue that differences in economic development across countries can be explained by a culture of entrepreneurship, that there is a role for government policy to shift culture towards risk-taking and innovation but that, ultimately, culture is subordinate to institutions.
An early contribution in the 1950s by Nobel Prize-winning economist Simon Kuznets, for instance, noted that at least two forces tended to increase inequality over time. One was the concentration of savings in the upper-income groups; he observed that in the United States the wealthiest 5 percent of the population accounted for close to two-thirds of total savings.
Attempts to understand population growth and the determinants of fertility date as far back as the late 1700s, when Thomas Malthus wrote ‘An Essay on the Principle of Population.’
Postulating that fertility decisions are influenced by women’s opportunity cost of time (Becker, 1960), choice over fertility has been incorporated in more recent times into growth models in order to understand the joint behavior of population and economic development throughout history. The large majority of existing analyses examine individual countries in a closed-economy setting. However, in an era of ever-increasing integration of world markets, the role of globalization in determining fertility can no longer be ignored.