The Power of the Family

Free Form Family Tree - Extended Family

Harvard economists Alberto Alesina and Paola Giuliano have written a fascinating study on the power of the family as an economic unit (pdf).  This study adds heft to what I’ve written about in the past about how strong families act as an bulwark against hard economic times.  Here is what they have to say:

The structure of family relationships influences economic behavior and attitudes.  We define our measure of family ties using individual responses from the World Value Survey regarding the role of the family and the love and respect that children need to have fro their parents for over 70 countries.  We show that strong family ties imply more reliance on the family as an economic unit which proves goods and services and less on the market and on the government for social insurance.  With strong family ties home production is higher, labor force participation of women and youngsters, and geographic mobility, lower.  Families are larger (higher fertility and higher family size) with strong family ties, which is consistent with the idea of the family as an important economic unit.  We present evidence on cross country regressions.  To assess causality we look at the behavior of second generation immigrants in the US and we employ a variable based on the grammatical rule of pronoun drop as an instrument for family ties.  Our results indicate a significant influence of the strength of family ties on economic outcomes . . . people belonging to strong family tie societies appear to be happier and satisfied with their life. [emphasis added]

It is a real tragedy that so many Americans use to understand this simple, but now forgotten, truth.