How Cultural Factors Shape Economic Outcomes

Children’s economic and social outcomes, both during their childhood and in their adult years, largely depend on the circumstances into which they are born and raised. Such circumstances are the product of children’s families, schools, and neighborhoods; the peers and adults with whom they spend time; the media images that shape their perceptions of themselves and their place in the world; and other factors—both internal and external to the individual child. Many would say that culture plays a large role in shaping a child’s life experiences and outcomes. But culture is hard to define and quantify, and controversial to talk about, especially as an ill-defined concept. Furthermore, the question of what—if anything—policy makers and practitioners can do about culture is hard to grapple with, unlike more readily measured and studied concepts like income or educational attainment.

This issue of the Future of Children aims to identify and measure elements of culture that predict children’s economic and social outcomes, and to present the best evidence to date about how these factors shape children’s economic outcomes. When we use the word culture here, we don’t purport to work either within or outside a precise definition of culture that comes from any particular academic body of thought. Rather, we consider particular elements of the social institutions, customs, and attitudes in US society that a layperson might reasonably consider to be culture.

The eight articles we’ve assembled here were written by highly regarded economists and psychologists. Each article considers a specific societal factor that research has shown to be important to economic and social outcomes: religious institutions; parenting practices; family structure; role models, mentors and media influences; peer and family effects; social capital and networks; beliefs about opportunity and mobility; and discrimination. All the authors have written through the lens of objectivity, with a deep and expansive knowledge of the relevant research.

Most people would probably place some of the topics covered here at the top of their list of what they consider cultural elements— for example, the role of religion or family structure. But other topics may seem less obviously “cultural.” For instance, economists often talk about labor market networks without explicitly referring to networks as part of a society’s culture. Nor do most economic considerations of discrimination explicitly consider that practice as a cultural construct. As co-editors, we view each article in this issue as exploring a critical element of the US cultural context shaping children’s lives, though the individual authors don’t necessarily define or discuss the factors they’re writing about explicitly in terms of culture.

Cultural Factors and Social Mobility

Our nation is in the grip of widening inequality and social fragmentation. The past four decades have seen massive increases in income for those at the top of the income distribution but only small to modest increases for those near the bottom. People who lack high levels of skills and education have seen their wages stagnate or fall and their economic insecurity rise. It’s harder today for children to achieve higher levels of income than their parents had, which suggests that the fabled American Dream is under threat. Many of us worry that the promise of opportunity and upward mobility is eroding. The issue of social mobility is front and center in academic research and domestic policy discussions.

Rates of social mobility vary widely from place to place, and many key correlates of upward mobility have to do with the elements of a place’s culture. Groundbreaking research from the Opportunity Insights project—a social science research lab at Harvard University, led by economists Raj Chetty, John Friedman, and Nathaniel Hendren, which makes use of confidential access to millions of US tax records—has provided a rich description of social mobility across localities in the United States. This data driven work reveals vast differences across the country in rates of upward mobility for children from low-income homes. Strikingly, the research shows that many of the factors that predict upward mobility rates from place to place have more to do with cultural elements than with policy per se. Family structure, social capital, and religiosity, for example, are more highly correlated with social mobility than are such factors as college tuition and tax progressivity. Furthermore, the presence of black fathers in a neighborhood and a measure of racial animus are the two strongest predictors of mobility rates for black boys. This doesn’t discount the importance of policy but rather makes the point that cultural factors are also critically important.

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Articles 1–3

Religious Institutions, Parenting, and Family Structure

In the first article in this issue, Daniel Hungerman, an economist at the University Notre Dame, reviews the roles that religious institutions play in people’s lives and considers how engagement with religious institutions shapes people’s economic wellbeing. Estimates suggest that the United States is home to over 380,000 religious congregations. Many of these provide help to people in their communities, not just to their own members, the most common types of social services being assistance with food, housing, and clothing. Religious congregations play a large role in education as well, and in community organizing.

Hungerman also discusses the consequences of religious participation, focusing on what rigorous evidence suggests about the causal role that engagement with religion has on people’s outcomes. For instance, a large number of studies report that religious people appear to be healthier, happier, and more civic-minded. But does that tell us something about the type of people who are likely to be religious, or about the effect of religion itself? Hungerman’s review of the evidence leads him to conclude that religiosity has a positive causal effect on wellbeing. Religious participation discourages unhealthy behaviors, such as heavy drinking and gambling, and generally promotes educational attainment. He also concludes that religious participation can increase a person’s tolerance of others and, in some contexts, advance the societal status of girls and women.

In the second article, Ariel Kalil of the University of Chicago and Rebecca Ryan of Georgetown University, both developmental psychologists, examine parenting practices and socioeconomic gaps in child outcomes. They document substantial differences between wealthier and poorer families, including growing gaps in parental engagement and time use. These gaps matter: the fact that children born to lower-income, less-educated parents are less likely to spend quality time with their parents compounds their relative economic disadvantage.

Evidence suggests that disadvantaged parents want to do many of the same things that higher-income parents do—such as reading to their children and engaging them in educational experiences like trips to parks and museums—but they’re less likely to do them. The authors consider a number of explanations for this discrepancy. One important contributing factor appears to be financial strain and family stress, both of which can impede parents’ emotional and cognitive functioning in ways that make it harder for them to interact with young children in intellectually stimulating and emotionally nurturing ways. The authors conclude with a discussion of the types of policies and programs that evidence suggests would most effectively narrow income-based parenting gaps.

Next, Melanie Wasserman, an economist at the University of California, Los Angeles, writes about the role of family structure, reviewing the latest evidence on the causal link between family structure and children’s economic and social outcomes. Wasserman moves beyond a consideration of whether family structure affects child outcomes—a topic that’s already been covered at length, including in previous Future of Children volumes—to present evidence about how family structure differentially affects children. Several recent studies indicate that growing up outside a family with two biological, married parents yields especially negative consequences for boys as compared to girls, including worse educational outcomes and higher rates of criminal involvement.

Wasserman describes mechanisms that may link family structure to children’s outcomes, in terms of both the main effect and gender differences. These include same-gender role models (in the household and in the neighborhood), parental resources (income and other), parenting quantity/quality (including parental time allocation by child gender), and the differential responsiveness of boys to parental inputs, among other hypotheses. In discussing lessons for policy, Wasserman encourages efforts to supplement the educational, parental, and emotional resources available to those children who are most at risk of experiencing the negative effects of nontraditional family structures.

Articles 4-5

Social Influences on Behavior

Compared to the children of wealthier parents, children in low-income families are less likely to have economically successful role models and mentors, and are likely to spend more time with media. In our fourth article, economists Melissa Kearney of the University of Maryland and Phillip Levine of Wellesley College review the theoretical and empirical evidence about how and why role models, mentors, and media influences affect children’s outcomes.

Kearney and Levine describe evidence showing that role models and media matter for children’s outcomes. Many studies demonstrate positive same-gender and same-race role model effects in schools. Formal mentoring programs, such as Big Brothers Big Sisters, can also have positive impacts on participants, in the form of better school performance and lower rates of involvement with the criminal justice system. Media content also matters: encouragingly, media can be a force for good in advancing children’s and teens’ educational and social outcomes. The authors conclude that interventions designed to improve the social influences children face could help increase rates of upward mobility for children from low-income homes.

In article 5, Gordon Dahl, an economist at the University of California, San Diego, takes on the related topic of how peers and families shape social group norms. He describes how researchers have overcome the challenge of separating peer and family effects from shared peer and family preferences, so that they can now generate credible estimates of how the behaviors of peers and family members affect a person’s choices in work and program participation. The evidence suggests that when a policy changes a person’s employment or program participation, it also has large spillover effects on that person’s family members and peers. Dahl points out the policy relevance of large social multiplier effects. For instance, to the extent that increased take-up of a government assistance program implies greater participation among the children and relatives of current beneficiaries, we should expect higher program caseloads and costs in the long term.

Articles 6-8

Networks and Social Contexts

Scholars and policy makers alike are increasingly interested in understanding how social capital shapes people’s economic lives. But the idea of social capital is an amorphous one. In article 6, economists Judy Hellerstein of the University of Maryland and David Neumark of the University of California, Irvine, define social capital as networks of relationships among people who are connected by where they live or work. The authors draw on survey evidence, case studies, and administrative data to document that such networks play an important role in improving wellbeing, especially in terms of better labor market outcomes. The evidence suggests that when it comes to getting a job, personal networks are especially important to immigrants. Hellerstein and Neumark also discuss some limited evidence on how neighborhood networks may shape children’s health and educational outcomes.

Social context extends beyond personal networks and relationships to our beliefs about the society we live in and the discrimination and biases we encounter as we move through life. In article 7, Mesmin Destin, a psychologist at Northwestern University, examines how beliefs about opportunity and economic mobility in society affect one’s behaviors. He points out that several disciplinary perspectives have conceptualized and empirically documented important links between societal-level economic inequality, individual level beliefs about the attainability of socioeconomic mobility, and behaviors related to socioeconomic success among youth and young adults from low-income backgrounds. The dominant framework Destin describes comes from robust research in social psychology that directly links people’s expectations of future success to their level of motivation to persist on tasks and in areas of life that could contribute to success. For example, students who see a connection between academics and the kinds of jobs they hope to have are more motivated to work hard in school, and they ultimately have better academic outcomes than students who don’t see these connections. Drawing on lessons from psychology, as well as cultural sociology, contemporary anthropology, and economics, Destin notes that the more information young people’s contexts provide about the opportunities available to them, the more likely they are to pursue their aspirations.

The final article takes up the expansive issue of discrimination. Economists Kevin Lang of Boston University and Ariella Kahn-Lang Spitzer of Mathematica (a policy research firm) write about how discrimination and bias shape outcomes. Lang and Kahn-Lang Spitzer focus primarily on discrimination by race, while acknowledging that discrimination exists along many other dimensions as well, including gender, sexual orientation, religion, and ethnicity. They describe evidence of substantial racial disparities in the labor market, education, criminal justice, health, and housing, and show that in each of these domains, those disparities at least partially reflect discrimination. The authors note that the disparities are both the cause and the result of discrimination, and reinforce each other. For instance, harsher treatment from the criminal justice system makes it more difficult for black people to get good jobs, which makes it more likely they’ll live in poor neighborhoods and that their children will attend inferior schools. Lang and Kahn-Lang Spitzer argue that simply prohibiting discrimination is less effective at addressing disparities than policies that decrease residential and social distance between people of different races.

Moving policy and programs forward

It wasn’t our goal as editors of this issue to make pronouncements about what is or is not culture. Nor did we aim to explore the cultural determination of social institutions and norms. Rather, we invited a set of experts to objectively describe the evidence about how various aspects of social institutions, norms, and behaviors shape children’s outcomes. The articles in this issue take a quantitative, empirically rigorous approach to defining and studying specific cultural constructs, and they advance the policy conversation about how culture shapes children’s outcomes. We anticipate (and hope) that these articles, both individually and collectively, will be useful to policy makers, practitioners, and advocates for children.



The authors that contributed to this issue of Future of Children are as follows: Daniel Hungerman (University of Notre Dame), Ariel Kalil (University of Chicago), Rebecca Ryan (Georgetown University), Melanie Wasserman (UCLA), Melissa Kearney (University of Maryland), Phil Levine (Wellesley College), Gordon Dahl (UC San Diego), Judy Hellerstein (University of Maryland), David Neumark (University of California, Irvine), Mesmin Destin (Northwestern), Kevin Lang (Boston University), and Ariella Kahn-Lang Spitzer (Mathematica). Kevin Lang is the current Vice President of the Society of Labor Economists and will begin his term as President-elect on July 1, 2020. The authors that contributed to this issue did not receive financial support from any firm or person for this article or from any firm or person with a financial or political interest in this article. None of the authors is currently an officer, director, or board member of any organization with a financial or political interest in this article.
  • Footnotes
    1. Raj Chetty et al., “The Fading American Dream: Trends in Absolute Income Mobility since 1940,” Science 356 (2017): 398–406,
    2. See Raj Chetty et al., “Where Is the Land of Opportunity? The Geography of Intergenerational Mobility in the United States,” Quarterly Journal of Economics 129 (2014): 1553–1623, qju022; and Raj Chetty et al., “Race and Economic Opportunity in the United States: An Intergenerational Perspective,” working paper, National Bureau of Economic Research, Cambridge, MA, 2019, https://www.