DP7405 Does Culture Affect Unemployment? Evidence from the Röstigraben

Author(s): Beatrix Brügger, Rafael Lalive, Josef Zweimüller
Publication Date: August 2009
Keyword(s): cultural transmission, culture, regional unemployment, unemployment duration
JEL(s): J21, J64, Z10
Programme Areas: Labour Economics
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=7405

This paper studies the role of culture in shaping unemployment outcomes. The empirical analysis is based on local comparisons across a language barrier in Switzerland. This Röstigraben seperates cultural groups, but neither labor markets nor political jurisdictions. Local contrasts across the language border identify the role of culture for unemployment. Our findings indicate that differences in culture explain differences in unemployment duration on the order of 20 %. Moreover, we find that horizontal transmission of culture is more important than vertical transmission of culture and that culture is about as important as strong changes to the benefit duration.