Moms vs. Markets

Mom’s home cooking may be comforting, but it could be stunting economic growth.

A provocative paper by economists Alberto Alesina of Harvard University and Paola Giuliano of the University of California, Los Angeles, argues that countries with strong, close-knit family structures tend to underperform economically and, adding insult to injury, have more dysfunctional political systems.

Alesina and Giuliano looked at data from the World Values Survey, which probes national attitudes on questions like whether it is the responsibility of parents to sacrifice for their children and whether kids are obligated to obey their parents unquestioningly. According to these criteria, Scandinavian and Eastern European countries tend to have the weakest family ties, while Southern European, Latin American, African, and East Asian countries have the strongest. (The United States falls somewhere in the middle.) Alesina and Giuliano found that countries with strong family structures tend to have lower interest in political participation and innovation, as well as more traditional attitudes toward women in the workplace. These countries also tend to have lower GDPs and more corruption.

"Strong family structures imply inward-looking attitudes, low levels of trust for people outside the family, and family firms that get passed down from one member to another — even if the next generation isn’t the best person," Alesina says. This is not the "kind of open society and free competition that leads to growth."

As a textbook example, he points to the country where he grew up. "Italy is a society where youngsters are very risk-averse. They live at home until their 30s, young couples live very close to their parents, there’s very little social and geographical mobility, and the participation of women in the workforce is very low," he says. "So Italy has been stagnating for a couple of decades."

The researchers are quick to point out, however, that their findings are not an attack on family values. "It’s not that family is bad or family is good. It’s a trade-off," Alesina says. "In Italy, the family has negative implications for market-driven growth, but may have positive implications for a sense of security and support." Indeed, the paper shows that people living in countries with close families report feeling happier and healthier. Young people striking out on their own might help the economy, but when they need a home-cooked meal or a shoulder to cry on, the invisible hand just won’t cut it.