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Upstream Intergenerational Transfers in Economic Development: The Role of Family Ties and their Cultural Transmission

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journal contribution
posted on 2021-03-15, 14:54 authored by Dimitrios Varvarigos
I construct a model where upstream income transfers, from adult children to their old parents, are driven by a culture of strong family ties. This evolves endogenously, through a process of intergenerational cultural transmission. The two-way causal link between economic and cultural change can be a strong enough force to offset cultural substitution, thus generating path-dependent outcomes. These outcomes show that economic development is negatively related with upstream intergenerational transfers, and with the strength of family ties. On the one hand, the economy may follow a convergence path towards a low level of economic development, where adherence to strong family ties is the dominant characteristic of a culturally homogeneous population, and where the overall flow of intergenerational transfers is substantial. On the other hand, the economy may follow a different path of convergence towards a relatively higher level of economic development, where the population is more diverse in terms of their attitudes on family ties, and where the overall flow of intergenerational transfers is lower by comparison.

History

Author affiliation

School of Business

Version

  • AM (Accepted Manuscript)

Published in

Journal of Mathematical Economics

Publisher

Elsevier

issn

0304-4068

Acceptance date

2021-03-06

Copyright date

2021

Available date

2022-09-19

Language

en

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