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The German miracle or the miracle of the cultural attitude

The German miracle or the miracle of the cultural attitude Purpose – The purpose of this paper is to explore the link between redistribution, convergence and local cultural capital (as defined by culture-based development concept). Design/methodology/approach – The paper infers the basic mechanism of the cultural dependence of convergence and inequality – through an empirical test for the case of the “German job miracle” during the current crisis. Two empirical questions are asked: first, is local income inequality associated with local cultural capital and second, is the negative convergence between East and West Germany during the crisis related to culturally sensitive employers’ preference for job preservation vs job loss. An OLS enquiry and two deeper estimation methods (a logit model and a 3SLS simultaneous equations model) are alternatively applied in order to triangulate the empirical results. Findings – The findings support the existence of cultural effect on local income inequality and cultural path dependence of employers’ preferences for job preservation vs job loss in a condition of economic shock. Originality/value – The paper provides both theoretical reasoning and empirical illustration of the significance of the cultural effect on human preferences which may or may not allow for redistribution and convergence between localities. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Social Economics Emerald Publishing

The German miracle or the miracle of the cultural attitude

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References (34)

Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
0306-8293
DOI
10.1108/IJSE-11-2012-0211
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to explore the link between redistribution, convergence and local cultural capital (as defined by culture-based development concept). Design/methodology/approach – The paper infers the basic mechanism of the cultural dependence of convergence and inequality – through an empirical test for the case of the “German job miracle” during the current crisis. Two empirical questions are asked: first, is local income inequality associated with local cultural capital and second, is the negative convergence between East and West Germany during the crisis related to culturally sensitive employers’ preference for job preservation vs job loss. An OLS enquiry and two deeper estimation methods (a logit model and a 3SLS simultaneous equations model) are alternatively applied in order to triangulate the empirical results. Findings – The findings support the existence of cultural effect on local income inequality and cultural path dependence of employers’ preferences for job preservation vs job loss in a condition of economic shock. Originality/value – The paper provides both theoretical reasoning and empirical illustration of the significance of the cultural effect on human preferences which may or may not allow for redistribution and convergence between localities.

Journal

International Journal of Social EconomicsEmerald Publishing

Published: Nov 4, 2014

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