Culture Club

Sometimes you need to go outside the field of economics to solve the most tenacious economic problems. That would certainly be the opinion of Dr. Michael Camasso, a DAFRE professor who has received more than $5 million from the European Union to study the role that national cultures play in youth unemployment.

This approach is not without risk. Drawing connections between cultural differences and economic outcomes, says Camasso, “can lead to stereotyping, nativism, racism, and dangerous nationalism.” On the other hand, a full ten years after the 2008 recession roughly 33% of Italians in their mid-20s remain idle. The same figure in Germany is closer to 10%. “The recession alone can’t account for the magnitude and persistence of these kinds of differences,” says Camasso.

Both economists and anthropologists recognize that cultural habits can affect economic choices, and that the effects of those choices will vary systematically across geographic space. How do you study a subject like this scientifically and respectfully?

Dr. Camasso and his collaborator at Rutgers Edward J. Bloustein School of Planning and Public Policy, Professor Radha Jagannathan, have a clear answer to that question. “You assemble a large, representative sample of youth and adults across a number of countries,” he says, “and ask them to choose between hypothetical pairs of jobs based on specific attributes. Then you infer cultural differences using statistical analysis of the results.” 

Consider three attributes for a hypothetical job choice: a job is “valued by parents,” “valued by society,” or “valued by one’s self.” These attributes are easy to understand and presented to the respondent as equally valid—there is no “leading the witness.” Examining hypothetical job choices based on attributes like these can provide insights into broader cultural perspectives that affect when a person enters the labor force and for what type of job.

In another innovation, Dr. Camasso and Dr. Jagannathan used a fractional factorial design that reduces the number of choices any individual respondent must make, while economizing on overall sample size. The researchers also interviewed three generations within the same families. This allows them to draw conclusions not only on culturally determined values, but also on the transmission of those values across generations.

Dr. Camasso and his colleagues in Europe are now analyzing the data. The policy implications of this work lie mostly in the earliest stages of education, when one’s attitudes toward employment and future training are shaped. Whether or not longstanding cultural values across Europe can be transformed to “fix” the labor market is another question. Listening to Dr. Camasso compare Germans’ trust of corporations to the typical French person’s antipathy, or hearing him describe the Italians’ unique reliance on family as a source of jobs as well as a social safety net, is to realize that cultures not only differ across the continent, they are also deeply entrenched. 

Concludes Camasso: “The Eurozone is a unified labor market, but without a unified set of values.”  Presumably it is better to understand this underlying diversity than to ignore it. 

Unemployment Line
Residents of Spain line up for a soup kitchen.  Source:  El Pais, November 24, 2017.