Abstract

This paper provides evidence for how cultural values surrounding the perceived degree of freedom in life influence real outcomes in the market. I proxy the perception of control in life as being the perceived returns to effort and other inputs. I first demonstrate significant between country differences in the cultural belief surrounding one’s perception of control and freedom in life. Controlling for a great deal of covariates, I then use global panel data from two waves of the World Values Survey to demonstrate a strong relationship between the perception by an individual of her control over her life, and her outcomes in the labor market. These results in the global panel are robust to controlling for a variety of individual-level characteristics as well as time-fixed effects.
In a panel of second-generation immigrants from the United States, I give evidence for cultural transmission of percep- tions of personal life control affecting educational outcomes in the same manner as the global panel. I then demonstrate that the vertical transmission of this cultural value has a persisting influence on outcomes for offspring in the markets for both labor and private health insurance. Results from the United States panel are robust to controlling for individual-level characteristics, as well as effects fixed for both time and geography, by county.