Essays on the economic impact of religiosity and family ties

• Main Author: Ji, Yaling
• Other Authors: James Ang
• Format: Theses and Dissertations
• Language: English
• Published: 2019
• Subjects: DRNTU::Social sciences::Sociology::Family, marriage and women; DRNTU::Social sciences::Economic theory
• Online Access: https://hdl.handle.net/10356/103515; http://hdl.handle.net/10220/47385
• Institution: Nanyang Technological University

This thesis seeks an understanding of how cultural factors may affect economic behavior and drive aggregate outcomes. It comprises 3 self-contained essays that explore the link between the strength of social institutions and economic issues, with the purpose of providing insights from an empirical angle to yield policy-relevant research outcomes. We focus on the dominance of two social institutions in this thesis – religion and family, both of which are historically common foundations of human cultures throughout the world. We investigate how variations in the level of religiosity and the strength of family ties may affect attitudes towards immigration, as well as the extent of financial inclusiveness. In chapter 1, we look at the link between religiosity and attitudes towards immigration. Immigration is a contentious area in the public sphere today, with communities having increasingly polarized outlooks towards pro-immigration policies in many developed countries. The recent literature argues that non-economic social and cultural factors explain a substantial share of the variation in individual attitudes towards immigration. However, it is still unclear what these non-economic factors are. This chapter argues that the intensity of religious beliefs and the extent of the religious social network are important determinants of immigration attitudes. Using both individual and subnational regional analyses, we find robust evidence that stronger religious beliefs are linked to greater hostility towards pro-immigration policies. To deal with endogeneity concerns, we employ an instrumental variable that measures a subnational district’s exposure to recent significant earthquakes. Financial inclusion, conceptually defined as the access and usage of formal financial services, is widely linked to poverty alleviation and is a policy objective for many governments worldwide. In chapter 2, we explore the notion that the preference for specific sources of finance stems from the extent of social capital that is available. More specifically, we argue that the strength of family ties determines the adoption and usage of services provided by financial institutions. Using both international and the U.S. data, we find significant evidence indicating that stronger family ties are linked to a lower ownership rate of financial accounts and usage of formal financial services. To identify exogenous variation in the strength of family ties, we employ an index representing the country’s suitability for wheat cultivation at the cross-country level and we examine the effect of inter-generational transmission in the strength family ties through a sample of second-generation immigrants in the US. Chapter 3 estimates the impact of religiosity on financial inclusiveness. We argue that the intensity of religious beliefs and practices can impose informal constraints on our preferences, which in turn affect the composition of incentives and financial choices within societies. Religiosity may also play a role in defining societal norms and influence the development of financial sector. Our results suggest that higher levels of religiosity are associated with lower adoption and usage of formal financial services today. This is observed across U.S. states and across different countries, even after accounting for important cultural and geographical factors as well as measures of economic development. We employ a measure of historical disease prevalence as the main instrumental variable in our analyses and conduct over-identification tests using exposure to natural hazards as additional instruments. At the country level, we also implement a bounds test by Conley, Hansen, and Rossi (2012) to check that the IV results are likely to hold in the case that the exclusion restriction condition is violated.