Culture and stages of economic development

How do cultural differences in preferences affect economic development? This study develops a simple growth model that features two stages of development. In the first stage, is driven by human capital accumulation. second innovation. The economy does not necessarily experience transition from stage to stage. If this endogenous occur, converges steady-state level output. may remain middle-income trap under different conditions. Surprisingly, parental preference for education being too strong among one them. result formalizes potential explanation why Industrial Revolution did happen China.