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Wednesday, May 30, 2007

Economic Prosperity: Human Capital or Protestant Work Ethic?

From Andrew Leigh (via Tim Worstall):

Martin Luther’s Legacy, by Andrew Leigh [open link]: I’ve always found the studies that look at the effect of religion on economic growth a bit fluffy. But this very clever paper goes far further than previous work in explaining why Protestant countries and regions might grow faster. If you learn to read the bible, you can read other things too.

Was Weber Wrong? A Human Capital Theory of Protestant Economic  History, by Sascha Becker & Ludger Woessmann: Max Weber attributed the higher economic prosperity of Protestant regions to a Protestant work ethic. We provide an alternative theory, where Protestant economies prospered because instruction in reading the Bible generated the human capital crucial to economic prosperity. County-level data from late 19th century Prussia reveal that Protestantism was indeed associated not only with higher economic prosperity, but also with better education. We find that Protestants’ higher literacy can account for the whole gap in economic prosperity. Results hold when we exploit the initial concentric dispersion of the Reformation to use distance to Wittenberg as an instrument for Protestantism.

    Posted by on Wednesday, May 30, 2007 at 05:22 PM in Academic Papers, Economics | Permalink  TrackBack (0)  Comments (28)


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