Abstract This paper studies how economic incentives influence cultural transmission, using a crucial expression of cultural identity: child naming decisions. Our focus is on Arabic versus non-Arabic names given in France over the 2003–2007 period. Our model of cultural transmission features three determinants: (i) vertical (parental) cultural transmission culture; (ii) horizontal (neighbourhood) influence; (iii) information on the economic penalty associated with Arabic names. We find that economic incentives largely influence naming choices: if the parental expectation on the economic penalty was zero, the annual number of babies born with an Arabic name would be more than 50% larger.
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