Individualism, Human Capital Formation, and Labor Market Success

Arbeitspapier

There is an ongoing debate about the economic effects of individualism. We establish that individualism leads to better educational and labor market outcomes. Using data from the largest international adult skill assessment, we identify the effects of individualism by exploiting variation between migrants at the origin country, origin language, and person level. Migrants from more individualistic cultures have higher cognitive skills and larger skill gains over time. They also invest more in their skills over the life-cycle, as they acquire more years of schooling and are more likely to participate in adult education activities. In fact, individualism is more important in explaining adult skill formation than any other cultural trait that has been emphasized in previous literature. In the labor market, more individualistic migrants earn higher wages and are less often unemployed. We show that our results cannot be explained by selective migration or omitted origin-country variables.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 14820

Classification and Topics

• Classification: Wirtschaft ; Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡ ; Human Capital; Skills; Occupational Choice; Labor Productivity ; Education and Research Institutions: General ; Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification
• Subject: cognitive skills ; culture ; individualism ; labor market ; international comparisons

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Hartinger, Katharina ; Resnjanskij, Sven ; Ruhose, Jens ; Wiederhold, Simon
• Event: Veröffentlichung
• (who): Institute of Labor Economics (IZA)
• (where): Bonn
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/250481
• Last update: 10.03.2025, 11:44 AM CET