Oktober 2019

IZA DP No. 12692: Culture or Context? Revisiting the Role of Culture in Shaping Economic Outcomes

Past studies have consistently shown that cultural norms predict individual economic outcomes for second-generation US immigrants. However, due to the (mainly) European composition of immigrants prior to the 1965 Immigration Reform Act, most researchers have not accounted for the role of race and ethnicity in identifying culture parameters. Moreover, the majority of studies assume the US is a homogenous region in confronting challenges related to integrating women and disadvantaged minority groups into the labor market. Using recent micro-level data of working-age higher order immigrants, along with detailed local, social capital and source- country measures, allow me to conduct a comprehensive analysis of the relationship between cultural norms and female labor supply. For non-Hispanic Whites, the impact of culture is explained by variation in country-level factors, such as passport power and internationally standardized exam scores. In contrast, for Blacks, the relevant predictors of labor supply are local culture and social capital measures.