Home Business & Economics Dissecting the act of god: an exploration of the effect of religiosity on economic activity
Article
Licensed
Unlicensed Requires Authentication

Dissecting the act of god: an exploration of the effect of religiosity on economic activity

  • Jean-Francois Carpantier and Anastasia Litina EMAIL logo
Published/Copyright: January 10, 2018
The B.E. Journal of Macroeconomics
From the journal The B.E. Journal of Macroeconomics Volume 19 Issue 2

Abstract

This research explores whether religiosity has a persistent effect on economic outcomes. We follow a three-step analysis. First, we use a sample of migrants in the United States to establish that religiosity in the country of origin has a lasting effect on the religiosity of migrants. Second, by exploiting variation in the inherited component of religiosity of migrants and controlling only for a baseline set of controls, we uncover a causal link between several aspects of religiosity and income level. The empirical findings of the second step suggest that i) church attendance has a positive impact on income; and ii) stronger faith is associated with a higher income. Finally, we augment the set of controls included in the measure of inherited religiosity in order to capture the effects of social capital, education, and of traits conducive to income growth. When controlling for social capital, the effect of religious attendance on economic outcomes vanishes, and when controlling for the presence of traits conducive to growth, the effect of intensity of faith vanishes as well. We therefore conclude that when properly accounting for unobservables, religiosity does not affect per capita income.

Keywords: beliefs; culture; religiosity
JEL Classification: A14; Z12

Acknowledgement

The authors are grateful to the participants of the seminar series of CREA (University of Luxembourg), the Athens University of Economics and Business, the IRES macro lunch seminar at the Universite Catholique de Louvain and the Utrecht workshop on “The Deep Causes of Economic Development” for their helpful comments and suggestions.

Appendices

A Supplementary information

Table 15:

Countries of origin of the 2nd, 3rd and 4th generation migrants-1935 Cohort.

1935 Cohort
Family originFrequencyFamily originFrequency
Africa2011Japan6
Arab Countries5Lithuania17
Austria36Mexico103
Belgium24Netherlands288
Canada207Norway283
China2Philippines−
Czech Rep.104Poland173
Denmark124Portugal15
Finland47Puerto Rico20
France387Romania5
Germany3319Russia56
Greece12Spain96
Hungary25Sweden245
India14Switzerland84
Ireland2473UK3948
Italy243Yugoslavia16
Total14,388

  1. Summary: The table shows the country of origin for the 1935 cohort of migrants as well as the number of migrants coming from each country.

Table 16:

Countries of origin of the 2nd, 3rd and 4th generation migrants-2000 Cohort.

2000 Cohort
Family originFrequencyFamily originFrequency
Africa1183Japan56
Arab Countries26Lithuania74
Austria115Mexico669
Belgium34Netherlands214
Canada307Norway309
China46Philippines35
Czech Rep.292Poland709
Denmark109Portugal70
Finland97Puerto Rico199
France264Romania30
Germany2363Russia354
Greece100Spain139
Hungary129Sweden312
India22Switzerland56
Ireland1643UK1568
Italy1521Yugoslavia105
Total13,150

  1. Summary: The table shows the country of origin for the 2000 cohort of migrants as well as the number of migrants coming from each country.

Table 17:

Transmission of religious attitudes-country of origin fixed effects for the 1935 cohort.

(1)(2)(3)


1935 Cohort
AttendChurch MemberNear God
age0.027**0.009***0.009*
age2−1.86e−05−5.29e−05***−2.30e−05
men−0.829***−0.126***−0.325***
income0.102***0.0181***−0.007
emp0.00322−0.012−0.045
unemp−0.599***−0.065**−0.277***
Africa0.936***0.028***0.456***
Arab Countries−0.886***
Austria−0.414***−0.070***−0.385***
Belgium0.0577
Canada−0.118***−0.108***0.124***
China−1.314***
Czech. Rep0.720***−0.076***0.201***
Denmark−0.221***−0.050***0.126***
Finland−0.266***0.050***0.192***
France0.0210*−0.105***0.255***
Germany0.304***−0.0487***0.236***
Greece0.441***−0.234***
Hungary−0.0474*−0.120***0.299***
India1.070***
Ireland0.148***−0.086***0.211***
Italy−0.245***−0.215***−0.009
Japan−1.884***−0.490***
Lithuania−0.900***−0.133***
Mexico1.033***−0.056***0.337***
Netherlands0.324***0.016***0.290***
Norway0.356***−0.033***0.146***
Poland0.301***−0.173***0.122***
Portugal−1.433***−0.170***
Puerto Rico0.923***−0.183***0.726***
Romania−0.811***
Russia−0.744***−0.044***0.121***
Spain−0.300***−0.049***0.602***
Switzerland0.607***0.077***0.285***
UK0.098***−0.040***0.138***
Yugoslavia1.041***0.440***1.043***
Observations12,88859873382
R-squared0.0580.0570.097

  1. Summary: The table establishes the significance of the coefficient of the country of origin fixed effects for the 1935 cohort, suggesting that culture matters in the transmission of religious attitudes.

Table 18:

Transmission of Religious attitudes-country of origin fixed effects for the 2000 cohort.

(1)(2)(3)


2000 Cohort
AttendChurch MemberNear God
age0.036***0.009***0.006
age2−0.000−6.08e−05*2.52e−05
men−0.582***−0.088***-0.252***
income0.082***0.0154***−0.005
emp−0.156**−0.004−0.004
unemp−0.628***−0.082**0.055
Africa0.893***0.034***0.217***
Arab Countries0.003
Austria0.087**−0.014−0.127***
Belgium−0.190***
Canada−0.104***−0.140***0.067***
China−1.495***
Czech. Rep0.139***−0.143***0.090***
Denmark−0.358***0.008−0.473***
Finland−0.991***−0.133***−0.229***
France−0.315***−0.033***−0.011
Germany−0.012−0.046***0.002
Greece−0.420***−0.081***
Hungary−0.473***−0.089***0.028
India0.865***
Ireland−0.066***−0.054***−0.053***
Italy−0.296***−0.185***−0.068***
Japan−1.057***−0.095***
Lithuania−0.213***−0.121***
Mexico0.371***−0.153***0.044***
Netherlands1.005***0.0985***0.255***
Norway−0.226***−0.0995***−0.050***
Philippines0.348***
Poland0.001−0.140***−0.191***
Portugal−0.797***−0.337***
Puerto Rico−0.405***−0.135***0.137***
Romania−1.286***
Russia−1.142***−0.110***−0.544***
Spain0.166***−0.133***0.505***
Switzerland0.440***−0.107***−0.185***
UK−0.173***−0.042***−0.030**
Yugoslavia−0.084**−0.077***−0.232***
Obs11,94835882078
R-squared0.0660.0490.076

  1. Summary: The table establishes the significance of the coefficient of the country of origin fixed effects for the 2000 cohort, suggesting that culture matters in the transmission of religious attitudes.

B Variable definitions and sources

B.1 Micro analysis variables

GSS Dataset.

Church Attendance. “Church Attendance” corresponds to the question “How often r attends religious services?”. The variable takes values from 0 to 8, with 0 denoting “Never” and 8 denoting “More than once per week”.

Member of a Church. “Church Member” corresponds to the question is “Membership in Church Groups”. The variable is binary with 1 denoting “No” and 2 denoting “Yes”.

Intensity of Religiosity. “Near God” corresponds to the question “How close does r feel to God”. The variable takes values from 0 to 4 with 0 denoting “Does not believe” and 4 denoting “extremely close”.

Age. The variable indicates the age of individuals and takes values between 18 and 89. Age squared is the squared value of Age.

Men. The variable takes the value 1 if the gender of the individual is male.

Employed. The variable takes the value 1 if the individual is employed.

Income. The variables captures the income of individuals. It has 12 categories (1000$, 1000$–2999$, 3000$–3999$, 4000$–4999$, 5000$–5999$, 6000$–6999$, 7000$–7999$, 8000$–9999$, 10000$–14999$, 15000$–19999$, 20000$–24999$, 25000$ or more).

Education. The variable on individuals’ education is an ordered variable taking values from 0 to 20, denoting the highest number of years in school.

Trust. “Trust” is constructed using data from the relevant GSS question, on how much people can be trusted. The variable is binary and take the value of 0 if the response is “Cannot trust” or “Depends” and the value of 1 if the response is “People can be trusted”.

Hard Work. This variable captures the extent to which parents consider hard work as an important quality to teach to a child. The responses are ordered as follows: “Most important”, “2nd important”, “3rd important”, “4th important” and “least important”.

Help Others. This variable captures the extent to which parents consider helping others as an important quality to teach to a child. The responses are ordered as follows: “Most important”, “2nd important”, “3rd important”, “4th important” and “least important”.

Fairness. This variable captures the extent to which parents consider fairness as an important quality to teach to a child. The responses are ordered as follows: “Most important”, “2nd important”, “3rd important”, “4th important” and “least important”.

Ethnic Origin. The variable captures the ethnic origin of the family of individuals. They can declare up to three countries of origin ordering them according to which they relate to more. In the analysis we choose their first response. The respondents come from 23 countries or continents (Austria, Belgium, Canada, China, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, India, Ireland, Italy, Japan, Lithuania, Mexico, the Netherlands, Norway, Philippines, Poland, Portugal, Puerto Rico, Russia, Spain, Sweden, Switzerland, Great Britain and Yugoslavia. Moreover Africa is part of the sample (denoting all migrants of African origin) and Arabic countries.).

WVS

Church Attendance. The question in the WVS is “I’m going to ask how often you do certain things. For each activity,would you say you do them every week or nearly every week; once or twice a month; only a few times a year; or not at all?”. The measure takes values from 1 to 4 with 1 denoting “Not at all” and 4 denoting “Weekly”. The variable has been restructured so as to facilitate interpretation of the results.

Member of a Church. The actual measure is the answer to the question “Now I am going to read out a list of voluntary organizations; for each one, could you tell me whether you are a member, an active member, an inactive member or not a member of that type of organization? Church or religious organization”. The variable takes values from 0 to 2 with 0 denoting “Not a member” and 2 denoting “Active member”.

Intensity of Religiosity. Since WVS does not have a direct measure of how close one feels to god we use this as a proxy. The actual statement is “Life is meaningful only because God exists” and the variable takes the value 0 if they disagree with the statement and the value 1 if the agree. The results are similar if we use instead other proxies from the WVS such as belief in God.

B.2 Macro analysis variables

Income per Capita. Our income per capita measure is constructed using the updated 2013 Maddison dataset (Bolt and van Zanden 2013). For the years 1935–2000 we use the average of 5 years (i.e. 1930–1935 for T1 = 1935 and 1995–2000 for T2 = 2000). Similarly for the 1950–2000 period.

Initial Income per Capita. To construct the initial income per capita we use the updated 2013 Maddison dataset (Bolt and van Zanden 2013). For the years 1935–2000 we take the 1870 income per capita for T1 = 1935 and 1930 for T2 = 2000 ). For the 1950–2000 period, we take respectively 1900 and 1950.

Herfindhal Index of Religions. The Herfindahl index of religion shares comes from the Barro dataset on religious adherence (Barro and McCleary 2003) and is estimated using 10 religion groups and non-religion (including atheists).

Educational Attainement. The data on educational attainment comes from the Barro-Lee (Barro and Lee 2001) dataset and indicates the average years of schooling attained aggregated at the country level.

Polity IV. The quality of institutions measures, denoted by “Polity” comes from the Polity IV data set. We employ the measure “constraints on the chief executive”. The variable takes values from 1 to 7 with higher values denoting better quality of institutions.

References

Algan, Y., and P. Cahuc. 2010. “Inherited Trust and Growth.” American Economic Review 100 (5): 2060–2092.10.1257/aer.100.5.2060Search in Google Scholar

Anderson, L., J. Mellor, and J. Milyo. 2010. “Did the Devil Make Them Do It? The Effects of Religion in Public Goods and Trust Games.” Kyklos 63 (2): 163–175.10.1111/j.1467-6435.2010.00456.xSearch in Google Scholar

Azzi, C., and R. Ehrenberg. 1975. “Household Allocation of Time and Church Attendance.” The Journal of Political Economy 83 (1): 27–56.10.1086/260305Search in Google Scholar

Barro, R. J. 1998. Determinants of Economic Growth: A Cross-Country Empirical Study. p. 1. Cambridge, MA: MIT Press Books.Search in Google Scholar

Barro, R. J., and J.-W. Lee. 2001. “International Data on Educational Attainment: Updates and Implications.” Oxford Economic Papers 53 (3): 541–563.10.1093/oep/53.3.541Search in Google Scholar

Barro, R. J., and R. M. McCleary. 2003. “Religion and Economic Growth Across Countries.” American Sociological Review 68 (5): 760–781.10.2307/1519761Search in Google Scholar

Barro, R. J., and R. M. McCleary. 2006. “Religion and Economy.” The Journal of Economic Perspectives 20 (2): 49–72.10.1257/jep.20.2.49Search in Google Scholar

Becker, S. O., and L. Woessmann. 2009. “Was Weber Wrong? A Human Capital Theory of Protestant Economic History.” Quarterly Journal of Economics 124 (2): 531–596.10.1162/qjec.2009.124.2.531Search in Google Scholar

Benabou, R., T. Davide, and A. Vindigni. 2015. “Religion and Innovation.” American Economic Review 105 (5): 346–351.10.1257/aer.p20151032Search in Google Scholar

Berger, P. L. 2011. The Sacred Canopy: Elements of a Sociological Theory of Religion. New York, NY: Open Road Media.Search in Google Scholar

Berggren, N., and C. Bjørnskov. 2011. “Is the Importance of Religion in Daily Life Related to Social Trust? Cross-Country and Cross-State Comparisons.” Journal of Economic Behavior and Organization 80 (3): 459–480.10.1016/j.jebo.2011.05.002Search in Google Scholar

Berggren, N., and C. Bjørnskov. 2013. “Does Religiosity Promote Property Rights and the Rule of Law?” Journal of Institutional Economics 9 (2): 161–185.10.1017/S1744137413000039Search in Google Scholar

Bjørnskov, C. 2006. “The Multiple Facets of Social Capital.” European Journal of Political Economy 22 (1): 22–40.10.1016/j.ejpoleco.2005.05.006Search in Google Scholar

Bjørnskov, C., and K. Sønderskov. 2013. “Is Social Capital a Good Concept?” Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement 114 (3): 1225–1242.10.1007/s11205-012-0199-1Search in Google Scholar

Bénabou, R., D. Ticchi, and A. Vindigni. 2015. Religion and Innovation.Working Paper 21052 National Bureau of Economic Research.10.3386/w21052Search in Google Scholar

Bolt, J., and J. L. van Zanden. 2013. The First Update of the Maddison Project; Re-Estimating Growth Before 1820.Maddison-Project Working Paper WP-4 University of Groningen.Search in Google Scholar

Callen, J. L., and X. Fang. 2015. “Religion and Stock Price Crash Risk.” Journal of Financial and Quantitative Analysis (JFQA) 50 (1-2): 169–195.10.1017/S0022109015000046Search in Google Scholar

Campante, F., and D. Yanagizawa-Drott. 2013. Does Religion Affect Economic Growth and Happiness? Evidence from Ramadan.NBER Working Paper No. 19768.10.3386/w19768Search in Google Scholar

Cantoni, D. 2015. “The Economic Effects of the Protestant Reformation: Testing the Weber Hypothesis in the German Lands” Journal of the European Economic Association 13 (4): 561–598.10.1111/jeea.12117Search in Google Scholar

Cavalcanti, T., S. Parente, and R. Zhao. 2007. “Religion in Macroeconomics: A Quantitative Analysis of Weber’s Thesis.” Economic Theory 32 (1): 105–123.10.1007/s00199-006-0181-8Search in Google Scholar

Clingingsmith, D., A. I. Khwaja, and M. Kremer. 2009. “Estimating the Impact of the Hajj: Religion and Tolerance in Islam’s Global Gathering.” The Quarterly Journal of Economics 124 (3): 1133–1170.10.1162/qjec.2009.124.3.1133Search in Google Scholar

Durlauf, S. N., A. Kourtellos, and C. M. Tan. 2012. “Is God in the Details? A Reexamination of the Role of Religion in Economic Growth.” Journal of Applied Econometrics 27 (7): 1059–1075.10.1002/jae.1245Search in Google Scholar

Glaeser, E. L., and B. I. Sacerdote. 2008. “Education and Religion.” Education 2 (2): 188–215.10.1086/590413Search in Google Scholar

Gorodnichenko, Y., and G. Roland. 2011. “Which Dimensions of Culture Matter for Long-Run Growth?” The American Economic Review 101 (3): 492–498.10.1257/aer.101.3.492Search in Google Scholar

Guiso, L., P. Sapienza, and L. Zingales. 2003. “People’s Opium? Religion and Economic Attitudes.” Journal of Monetary Economics 50 (1): 225–282.10.1016/S0304-3932(02)00202-7Search in Google Scholar

Herzer, D., and H. Strulik. (2016). “Religiosity and Long-Run Productivity Growth,” Cege Discussion Papers Number 284.10.2139/ssrn.2800094Search in Google Scholar

La Porta, R., F. Lopez-de-Silanes, A. Shleifer, and R. W. Vishny. 1999. “The Quality of Government.” Journal of Law, Economics, and Organization 15 (1): 222–279.10.1093/jleo/15.1.222Search in Google Scholar

Lipford, J. W., and R. D. Tollison. 2003. “Religious Participation and Income.” Journal of Economic Behavior and Organization 51 (2): 249–260.10.1016/S0167-2681(02)00096-3Search in Google Scholar

Luttmer, Erzo F. P., and Monica Singhal. 2011. “Culture, Context, and the Taste for Redistribution.” American Economic Journal: Economic Policy 3 (1): 157–79. 10.3386/w14268Search in Google Scholar

Marx, K. 1904. A Contribution to the Critique of Political Economy. Chicago, IL: CH Kerr.Search in Google Scholar

Putnam, R. D. 2000. Bowling Alone: The Collapse and Revival of American Community. New York, NY: Simon and Schuster.10.1145/358916.361990Search in Google Scholar

Putnam, R. D., R. Leonardi, and R. Nanetti. 1993. Making Democracy Work: Civic Traditions in Modern Italy. Princeton, NJ: Princeton University Press.10.1515/9781400820740Search in Google Scholar

Renneboog, L., and C. Spaenjers. 2012. “Religion, Economic Attitudes, and Household Finance.” Oxford Economic Papers 64 (1): 103–127.10.1093/oep/gpr025Search in Google Scholar

Rupasingha, A., and J. Chilton. 2009. “Religious Adherence and County Economic Growth in the US.” Journal of Economic Behavior and Organization 72 (1): 438–450.10.1016/j.jebo.2009.05.020Search in Google Scholar

Smith, A. 1776. An Inquiry Into the Nature and Causes of the Wealth of Nations. Edited by Edwin Cannan’s annotated edition. http://press.uchicago.edu/ucp/books/book/chicago/I/bo3637045.html.10.1093/oseo/instance.00043218Search in Google Scholar

Strulik, H. 2016. “Secularization and Long-Run Economic Growth.” Economic Inquiry 54 (1): 177–200.10.1111/ecin.12242Search in Google Scholar

Tabellini, G. 2008. “Presidential Address: Institutions and Culture.” Journal of the European Economic Association 6 (2–3): 255–294.10.1162/JEEA.2008.6.2-3.255Search in Google Scholar

Tabellini, G. 2010. “Culture and Institutions: Economic Development in the Regions of Europe.” Journal of the European Economic Association 8 (4): 677–716.10.1111/j.1542-4774.2010.tb00537.xSearch in Google Scholar

Weber, M. 1905. The Protestant Ethic and the Spirit of Capitalism. London, UK: Allen & Unwin.Search in Google Scholar

Welch, M. R., D. Sikkink, and M. T. Loveland. 2007. “The Radius of Trust: Religion, Social Embeddedness and Trust in Strangers.” Social Forces 86 (1): 23–46.10.1353/sof.2007.0116Search in Google Scholar

Published Online: 2018-01-10

©2019 Walter de Gruyter GmbH, Berlin/Boston

Articles in the same Issue

  1. Advances
  2. What does a relative price of investment wedge reveal about the role of investment-specific technology?
  3. Envelope wages, hidden production and labor productivity
  4. Should individuals migrate before acquiring education or after? A new model of Brain Waste vs. Brain Drain
  5. Investment, technological progress and energy efficiency
  6. Bounded rationality and the ineffectiveness of big push policies
  7. Contributions
  8. Dissecting the act of god: an exploration of the effect of religiosity on economic activity
  9. Cross-industry growth differences with asymmetric industries and endogenous market structure
  10. Persistent Inequality, Corruption, and Factor Productivity
  11. The Finnish Great Depression of the 1990s: reconciling theory and evidence
  12. The growth-volatility relationship redux: what does volatility decomposition tell?
  13. Fiscal stimulus and unemployment dynamics
https://doi.org/10.1515/bejm-2016-0219
Keywords for this article
beliefs; culture; religiosity

Articles in the same Issue

  1. Advances
  2. What does a relative price of investment wedge reveal about the role of investment-specific technology?
  3. Envelope wages, hidden production and labor productivity
  4. Should individuals migrate before acquiring education or after? A new model of Brain Waste vs. Brain Drain
  5. Investment, technological progress and energy efficiency
  6. Bounded rationality and the ineffectiveness of big push policies
  7. Contributions
  8. Dissecting the act of god: an exploration of the effect of religiosity on economic activity
  9. Cross-industry growth differences with asymmetric industries and endogenous market structure
  10. Persistent Inequality, Corruption, and Factor Productivity
  11. The Finnish Great Depression of the 1990s: reconciling theory and evidence
  12. The growth-volatility relationship redux: what does volatility decomposition tell?
  13. Fiscal stimulus and unemployment dynamics
Sign up now to receive a 20% welcome discount
Institutional Access
How does access work?
Have an idea on how to improve our website?
Please write us.
© 2025 De Gruyter Brill
Downloaded on 31.12.2025 from https://www.degruyterbrill.com/document/doi/10.1515/bejm-2016-0219/pdf
Scroll to top button