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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 3: Approaches to the Analysis of Cultural Effects in the Labour Market

Siobhan Austen


3.1 INTRODUCTION The previous chapter described the meaning of culture and identified the major theoretical controversies that surround the topic. However, few comments were made about how studies of the effects of culture can and should be carried out. This chapter takes up the questions of possible approaches to the theoretical and empirical analyses of the regulatory effects of culture. The discussion is motivated, in part, by the need to establish a framework for the theoretical and empirical studies conducted in Chapters Four to Eight. There is also a need to bring together the different strands of a quite disparate literature on the economic analysis of culture and to identify how the strands of this literature relate to each other. The chapter is divided into two main parts. Section 3.2 provides an overview of the types of theoretical models that have been developed for the analysis of the regulatory effects of culture. The section identifies two different accounts of the origins of social norms and conventions. First, there is an evolutionary explanation that attributes humans’ apparent attachment to rules of fair division (such as those reflected in norms of equality and need) to the characteristics of life in prehistoric hunter-gatherer groups. Second, there is an explanation of norms and conventions that emphasizes their origins in the unplanned interactions of individuals. Section 3.3 discusses some of the important issues involved in attempting to identify the effects of social norms empirically. This section also identifies some of the...

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