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Cultural Roots of Economic Development: Evidence from Scandinavia

Carlsberg Foundation Reintegration Fellowships

What

What drives long-term economic growth? This is one of the most fundamental questions in economics. A growing body of research suggest the importance of a factor long ignored by economists: Culture. Studies on this topic aim to establish if and how cultural traits like trust, individualism, and gender roles shape economic development over time. A key empirical challenge is however the lack of adequate historical cultural indicators. This inhibits the study of culture over longer time periods and the identification of causal relationships. With novel databases I will study the role of culture in Scandinavian economic development in the period 1700-1900. In this time period, the Scandinavian countries transformed from poor, agricultural societies to some of the world's richest nations.

Why

Cultural norms help individuals make decisions in complex environments where figuring out the optimal action is often very costly. A question then is if cultural differences hold the power to shape economic outcomes across societies. Research has documented strong associations between culture and contemporary economic outcomes across societies. These correlations do however not imply causal relationships. To fully understand if and how cultural norms shape economic development over time, a historical perspective (and data) is necessary.

How

My research relies on population censuses and church records from the 18th and 19th centuries. With this data I can study important economic choices of millions of Scandinavians and examine if they were shaped by local cultural norms. For instance, it is commonly believed that a rising culture of individualism in Europe fostered economic development by encouraging mobility and innovation. This idea has however never been empirically tested in large scale databases. I bridge this gap with novel indicators of cultural identity from properties of first names and family patterns, which are unique in their scope and detail.

SSR

My research will uncover determinants and consequences of economic development that have so far been neglected in public debates and policy work. If cultural norms matter for the way in which a country develops, then this needs to be taken into account, when designing development strategies in different parts of the world.