Agricultural Returns to Labour and the Origins of Work ethics
Vasiliki Fouka and Alain Schläpfer
We examine the historical determinants of differences in preferences for work across societies today. Our hypothesis is that a society’s work ethic depends on the role that labour has played in it historically, as an input in agricultural production: societies that have for centuries depended on the cultivation of crops with high marginal returns to labour effort will work longer hours and develop a preference for working hard. We formalise this prediction in the context of a model of endogenous preference formation, with altruistic parents who can invest in reducing their offsprings’ disutility from work. To empirically found our model, we construct an index of potential agricultural labour intensity, that captures the suitability of a location for the cultivation of crops with high estimated marginal returns to labour in their production. We find that this index positively predicts work hours and attitudes towards work in contemporary European regions. We investigate various mechanisms of persistence, including cultural transmission, as well as a society’s production structure and institutions.