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Culture and the Labour Market

Siobhan Austen

Culture and the Labour Market attempts to define the meaning of culture and the nature of its possible consequences on economic processes and outcomes. In particular, the book examines alternative theoretical and empirical approaches to the economic analysis of cultural effects in the labour market. Using extensive new data from fourteen countries, the author finds tangible evidence of substantial cross-cultural differences in beliefs about wage inequality.
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Chapter 2: Culture and the Labour Market

Siobhan Austen


2.1 INTRODUCTION The labour market is that sphere of the economy where the allocation of paid work among competing uses is determined and where wages and other conditions of employment are decided. It is argued here that an understanding of culture is vital to any economic analysis of the labour market. Culture is a system of shared understandings, values, norms and expressive symbols (Di Maggio, 1994: 27). It determines, in large part, the value and significance that individuals attach to the alternative uses of labour. Particular aspects of culture, such as social norms, also help to shape the actions of individuals in the labour market and, thus, the nature of labour market outcomes, such as the structure and level of wages. As mentioned in the introductory chapter, mainstream neoclassical economics has largely neglected the relationship between culture and economic behaviour and outcomes. The typical characterization of humans as being purely self-interested with well-defined, independent preferences helps explain the omission. This has left an important gap in the labour economics literature. This chapter aims to make a start at bridging this gap in the literature by describing and discussing in broad terms the concept of culture as it relates to some important labour market issues. The chapter also sets out to describe the theoretical controversies associated with adopting a cultural perspective on labour market issues and to highlight the potential scope of cultural studies of these issues. In doing so, the chapter should help establish the context and importance...

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