The impact of ethic formation on individual income

Sarıbaş, Hakan (2010): The impact of ethic formation on individual income.

Abstract

In this paper, the relationships between individual income and ethics formation are studied. Our theoretical model explains what happens to individual incomes when a culture encourages people to devote life-time efforts to establish a virtuous character. Two propositions emerged from the present study. Firstly, if there exists a channel from effforts to income via ethics, individual income begins to increase and reaches a peak as more and more time is devoted to ethics formation. Additional time after the peak becomes detrimental to the individual income. Secondly, time for ethics formation becomes economically useless when the channel from efforts to income via ethics dissolves. Our simulations and econometric findings support the theoretical explanations.

• Item Type: MPRA Paper
• Language: English
• Keywords: Growth; Institutions; Ethics; Turkey
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O17 - Formal and Informal Sectors ; Shadow Economy ; Institutional Arrangements; C - Mathematical and Quantitative Methods > C0 - General > C02 - Mathematical Methods; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O12 - Microeconomic Analyses of Economic Development

References

-Barro, R. and Xavier Sala-i Martin (1992). Economic Growth. McGraw-Hill. -Ibn Hazm (2005). Ethics. Istanbul: Bilge Adamlar. -Hursthouse, R. (1999). On Virtue Ethics. Oxford: Oxford University Press. -North, Douglass C. (1989). Institutions and Economic Growth: An Historical Introduction. World Development 17 (9): 1319-1332. -North, Douglass C. (1991). Institutions. Journal of Economic Perspectives 5 (1): 97-112. -North, Douglass C. (1993). Prize Lecture. Lecture to the memory of Alfred Nobel. -North, Douglass C. (2003). The Role of Institutions in Economic Development. Discussion Paper Series, No. 2003.2, United Nations Economic Commission for Europe, Geneva, Switzerland. -Pritchett, L. (1997). Divergence-Big Time. Journal of Economic Perspectives 11 (3): 3-17. -Soysa, I. and Johannes Jütting (2007). Informal Institutions and Development: How They Matter and What Makes them Change. In informal Institutions: How Social Norms Help or Hinder Development. Development Centre Studies, OECD