IDEAS home Printed from https://ideas.repec.org/a/oup/restud/v86y2019i3p1170-1206..html
   My bibliography  Save this article

Historical Antisemitism, Ethnic Specialization, and Financial Development

Author

Listed:
  • Francesco D’Acunto
  • Marcel Prokopczuk
  • Michael Weber

Abstract

Historically, European Jews have specialized in financial services while being the victims of antisemitism. We find that the present-day demand for finance is lower in German counties where historical antisemitism was higher, compared to otherwise similar counties. Households in counties with high historical antisemitism have similar saving rates but invest less in stocks, hold lower saving deposits, and are less likely to get a mortgage to finance homeownership after controlling for wealth and a rich set of current and historical covariates. Present-day antisemitism and supply-side forces do not fully explain the results. Households in counties where historical antisemitism was higher distrust the financial sector more—a potential cultural externality of historical antisemitism that reduces wealth accumulation in the long run.

Suggested Citation

  • Francesco D’Acunto & Marcel Prokopczuk & Michael Weber, 2019. "Historical Antisemitism, Ethnic Specialization, and Financial Development," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 86(3), pages 1170-1206.
    • Handle: RePEc:oup:restud:v:86:y:2019:i:3:p:1170-1206.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/restud/rdy021
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Jha, Saumitra, 2013. "Trade, Institutions, and Ethnic Tolerance: Evidence from South Asia," American Political Science Review, Cambridge University Press, vol. 107(4), pages 806-832, November.
    2. Sascha O. Becker & Ludger Woessmann, 2009. "Was Weber Wrong? A Human Capital Theory of Protestant Economic History," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(2), pages 531-596.
    3. Daron Acemoglu & Tarek A. Hassan & James A. Robinson, 2011. "Social Structure and Development: A Legacy of the Holocaust in Russia," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 126(2), pages 895-946.
    4. Enrico Spolaore & Romain Wacziarg, 2013. "How Deep Are the Roots of Economic Development?," Journal of Economic Literature, American Economic Association, vol. 51(2), pages 325-369, June.
    5. Daron Acemoglu & Davide Cantoni & Simon Johnson & James A. Robinson, 2011. "The Consequences of Radical Reform: The French Revolution," American Economic Review, American Economic Association, vol. 101(7), pages 3286-3307, December.
    6. King, Gary & Rosen, Ori & Tanner, Martin & Wagner, Alexander F., 2008. "Ordinary Economic Voting Behavior in the Extraordinary Election of Adolf Hitler," The Journal of Economic History, Cambridge University Press, vol. 68(4), pages 951-996, December.
    7. Mevlude Akbulut-Yuksel & Mutlu Yuksel, 2015. "The Long-Term Direct and External Effects of Jewish Expulsions in Nazi Germany," American Economic Journal: Economic Policy, American Economic Association, vol. 7(3), pages 58-85, August.
    8. Luigi Guiso & Tullio Jappelli, 2005. "Awareness and Stock Market Participation," Review of Finance, European Finance Association, vol. 9(4), pages 537-567.
    9. Irena Grosfeld & Seyhun Orcan Sakalli & Ekaterina Zhuravskaya, 2020. "Middleman Minorities and Ethnic Violence: Anti-Jewish Pogroms in the Russian Empire," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 87(1), pages 289-342.
    10. Alberto Bisin & Thierry Verdier, 2000. ""Beyond the Melting Pot": Cultural Transmission, Marriage, and the Evolution of Ethnic and Religious Traits," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(3), pages 955-988.
    11. Nico Voigtländer & Hans-Joachim Voth, 2012. "Persecution Perpetuated: The Medieval Origins of Anti-Semitic Violence in Nazi Germany," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 127(3), pages 1339-1392.
    12. Waldinger, Fabian, 2010. "Quality matters: the expulsion of professors and Ph.D. student outcomes in Nazi Germany," LSE Research Online Documents on Economics 28737, London School of Economics and Political Science, LSE Library.
    13. Fabian Waldinger, 2010. "Quality Matters: The Expulsion of Professors and the Consequences for PhD Student Outcomes in Nazi Germany," Journal of Political Economy, University of Chicago Press, vol. 118(4), pages 787-831, August.
    14. van Rooij, Maarten & Lusardi, Annamaria & Alessie, Rob, 2011. "Financial literacy and stock market participation," Journal of Financial Economics, Elsevier, vol. 101(2), pages 449-472, August.
    15. Yann Algan & Pierre Cahuc, 2010. "Inherited Trust and Growth," American Economic Review, American Economic Association, vol. 100(5), pages 2060-2092, December.
    16. Christina Paxson, 1990. "Borrowing Constraints and Portfolio Choice," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 105(2), pages 535-543.
    17. Guiso, Luigi & Jappelli, Tullio & Terlizzese, Daniele, 1996. "Income Risk, Borrowing Constraints, and Portfolio Choice," American Economic Review, American Economic Association, vol. 86(1), pages 158-172, March.
    18. Maja Adena & Ruben Enikolopov & Maria Petrova & Veronica Santarosa & Ekaterina Zhuravskaya, 2015. "Radio and the Rise of The Nazis in Prewar Germany," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 130(4), pages 1885-1939.
    19. Nicola Gennaioli & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2013. "Human Capital and Regional Development," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(1), pages 105-164.
    20. Nicola Gennaioli & Andrei Shleifer & Robert Vishny, 2015. "Money Doctors," Journal of Finance, American Finance Association, vol. 70(1), pages 91-114, February.
      • Nicola Gennaioli & Andrei Shleifer & Robert Vishny, "undated". "Money Doctors," Working Paper 69721, Harvard University OpenScholar.
      • Gennaioli, Nicola & Shleifer, Andrei & Vishny, Robert W., 2014. "Money Doctors," Scholarly Articles 12965657, Harvard University Department of Economics.
      • Nicola Gennaioli & Andrei Shleifer & Robert W. Vishny, 2012. "Money Doctors," NBER Working Papers 18174, National Bureau of Economic Research, Inc.
      • Nicola Gennaioli & Andrei Shleifer & Robert Vishny, 2012. "Money Doctors," Working Papers 464, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
      • Nicola Gennaioli & Andrei Shleifer & Robert Vishny, "undated". "Money Doctors," Working Paper 228501, Harvard University OpenScholar.
      • Nicola Gennaioli & Andrei Shleifer & Robert Vishny, 2012. "Money doctors," Economics Working Papers 1355, Department of Economics and Business, Universitat Pompeu Fabra.
    21. Jha, Saumitra, 2014. "‘Unfinished business’: Historic complementarities, political competition and ethnic violence in Gujarat," Journal of Economic Behavior & Organization, Elsevier, vol. 104(C), pages 18-36.
    22. Renée Birgit Adams & Paola Sapienza & Luigi Zingales, 2012. "A Trust Crisis," International Review of Finance, International Review of Finance Ltd., vol. 12(2), pages 123-131, June.
    23. Nico Voigtländer & Hans-Joachim Voth, 2013. "Married to Intolerance: Attitudes toward Intermarriage in Germany, 1900-2006," American Economic Review, American Economic Association, vol. 103(3), pages 79-85, May.
    24. Harrison Hong & Jeffrey D. Kubik & Jeremy C. Stein, 2004. "Social Interaction and Stock-Market Participation," Journal of Finance, American Finance Association, vol. 59(1), pages 137-163, February.
    25. Georgarakos, Dimitris & Lojschova, Adriana & Ward-Warmedinger, Melanie E., 2009. "Mortgage Indebtedness and Household Financial Distress," IZA Discussion Papers 4631, Institute of Labor Economics (IZA).
    26. Ulrike Malmendier & Stefan Nagel, 2011. "Depression Babies: Do Macroeconomic Experiences Affect Risk Taking?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 126(1), pages 373-416.
    27. Bisin, Alberto & Verdier, Thierry, 2001. "The Economics of Cultural Transmission and the Dynamics of Preferences," Journal of Economic Theory, Elsevier, vol. 97(2), pages 298-319, April.
    28. Gormley, Todd & Liu, Hong & Zhou, Guofu, 2010. "Limited participation and consumption-saving puzzles: A simple explanation and the role of insurance," Journal of Financial Economics, Elsevier, vol. 96(2), pages 331-344, May.
    29. repec:hal:spmain:info:hdl:2441/432sbils8u9t7qa99cii5psht1 is not listed on IDEAS
    30. Luigi Pascali, 2016. "Banks and Development: Jewish Communities in the Italian Renaissance and Current Economic Performance," The Review of Economics and Statistics, MIT Press, vol. 98(1), pages 140-158, March.
    31. Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde, 2012. "The Intergenerational Transmission of Risk and Trust Attitudes," Review of Economic Studies, Oxford University Press, vol. 79(2), pages 645-677.
    32. Robert Warren Anderson & Noel D. Johnson & Mark Koyama, 2017. "Jewish Persecutions and Weather Shocks: 1100–1800," Economic Journal, Royal Economic Society, vol. 127(602), pages 924-958, June.
    33. Paul A. Samuelson, 2011. "Lifetime Portfolio Selection by Dynamic Stochastic Programming," World Scientific Book Chapters, in: Leonard C MacLean & Edward O Thorp & William T Ziemba (ed.), THE KELLY CAPITAL GROWTH INVESTMENT CRITERION THEORY and PRACTICE, chapter 31, pages 465-472, World Scientific Publishing Co. Pte. Ltd..
    34. Sascha O. Becker & Francesco Cinnirella & Erik Hornung & Ludger Woessmann, 2014. "iPEHD--The ifo Prussian Economic History Database," Historical Methods: A Journal of Quantitative and Interdisciplinary History, Taylor & Francis Journals, vol. 47(2), pages 57-66, June.
    35. Irena Grosfeld & Alexander Rodnyansky & Ekaterina Zhuravskaya, 2013. "Persistent Antimarket Culture: A Legacy of the Pale of Settlement after the Holocaust," American Economic Journal: Economic Policy, American Economic Association, vol. 5(3), pages 189-226, August.
    36. Koetter, Michael, 2013. "Market structure and competition in German banking: Modules I and IV," Working Papers 06/2013, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung.
    37. Betermier, Sebastien & Jansson, Thomas & Parlour, Christine & Walden, Johan, 2012. "Hedging labor income risk," Journal of Financial Economics, Elsevier, vol. 105(3), pages 622-639.
    38. de Bromhead, Alan & Eichengreen, Barry & O'Rourke, Kevin H., 2013. "Political Extremism in the 1920s and 1930s: Do German Lessons Generalize?," The Journal of Economic History, Cambridge University Press, vol. 73(2), pages 371-406, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Marcel Prokopczuk & Francesco D'Acunto & Michael Weber, 2015. "Distrust in Finance Lingers: Jewish Persecution and Households' Investments," 2015 Meeting Papers 26, Society for Economic Dynamics.
    2. Liu, Xianda & Hou, Wenxuan & Main, Brian G.M., 2022. "Anti-market sentiment and corporate social responsibility: Evidence from anti-Jewish pogroms," Journal of Corporate Finance, Elsevier, vol. 76(C).
    3. Becker, Sascha O. & Mukand, Sharun & Yotzov, Ivan, 2022. "Persecution, pogroms and genocide: A conceptual framework and new evidence," Explorations in Economic History, Elsevier, vol. 86(C).
    4. Leonardo M. Klüppel & Lamar Pierce & Jason A. Snyder, 2018. "Perspective—The Deep Historical Roots of Organization and Strategy: Traumatic Shocks, Culture, and Institutions," Organization Science, INFORMS, vol. 29(4), pages 702-721, August.
    5. Johannes Buggle & Thierry Mayer & Seyhun Orcan Sakalli & Mathias Thoenig, 2023. "The Refugee’s Dilemma: Evidence from Jewish Migration out of Nazi Germany," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 138(2), pages 1273-1345.
    6. Remi Jedwab & Noel D. Johnson & Mark Koyama, 2019. "Negative shocks and mass persecutions: evidence from the Black Death," Journal of Economic Growth, Springer, vol. 24(4), pages 345-395, December.
    7. Becker, Sascha O. & Rubin, Jared & Woessmann, Ludger, 2020. "Religion in Economic History: A Survey," CEPR Discussion Papers 14894, C.E.P.R. Discussion Papers.
    8. Sascha O. Becker & Luigi Pascali, 2019. "Religion, Division of Labor, and Conflict: Anti-semitism in Germany over 600 Years," American Economic Review, American Economic Association, vol. 109(5), pages 1764-1804, May.
    9. Sascha O. Becker & Jared Rubin & Ludger Woessmann, 2023. "Religion and Growth," Monash Economics Working Papers 2023-15, Monash University, Department of Economics.
    10. Becker, Sascha O. & Ferrara, Andreas, 2019. "Consequences of forced migration: A survey of recent findings," Labour Economics, Elsevier, vol. 59(C), pages 1-16.
    11. Sascha O. Becker, 2022. "Forced displacement in history: Some recent research," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 62(1), pages 2-25, March.
    12. Davide Cantoni & Noam Yuchtman, 2020. "Historical Natural Experiments: Bridging Economics and Economic History," NBER Working Papers 26754, National Bureau of Economic Research, Inc.
    13. Guiso, Luigi & Sodini, Paolo, 2013. "Household Finance: An Emerging Field," Handbook of the Economics of Finance, in: G.M. Constantinides & M. Harris & R. M. Stulz (ed.), Handbook of the Economics of Finance, volume 2, chapter 0, pages 1397-1532, Elsevier.
    14. Cemal Eren Arbatlı & Gunes Gokmen, 2023. "Human capital transfers and sub-national development: Armenian and Greek legacy in post-expulsion Turkey," Journal of Economic Growth, Springer, vol. 28(1), pages 1-43, March.
    15. Li, Logan, 2021. "Political violence and household savings: Evidence from the long-term effects of the Cultural Revolution," The Journal of the Economics of Ageing, Elsevier, vol. 19(C).
    16. Nico Voigtländer & Joachim Voth, 2012. "(Re-) Shaping hatred: Anti-Semitic attitudes in Germany, 1890-2006," Economics Working Papers 1344, Department of Economics and Business, Universitat Pompeu Fabra.
    17. Theresa Finley & Mark Koyama, 2018. "Plague, Politics, and Pogroms: The Black Death, the Rule of Law, and the Persecution of Jews in the Holy Roman Empire," Journal of Law and Economics, University of Chicago Press, vol. 61(2), pages 253-277.
    18. Irena Grosfeld & Seyhun Orcan Sakalli & Ekaterina Zhuravskaya, 2020. "Middleman Minorities and Ethnic Violence: Anti-Jewish Pogroms in the Russian Empire," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 87(1), pages 289-342.
    19. Karaja, Elira & Rubin, Jared, 2022. "Θ The cultural transmission of trust norms: Evidence from a lab in the field on a natural experiment," Journal of Comparative Economics, Elsevier, vol. 50(1), pages 1-19.
    20. Buggle, Johannes C., 2016. "Law and social capital: Evidence from the Code Napoleon in Germany," European Economic Review, Elsevier, vol. 87(C), pages 148-175.

    More about this item

    Keywords

    Cultural economics; Cultural finance; Intergenerational transmission of norms; Stereotypes; Household finance; History & finance;
    All these keywords.

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • N90 - Economic History - - Regional and Urban History - - - General, International, or Comparative
    • Z10 - Other Special Topics - - Cultural Economics - - - General
    • Z12 - Other Special Topics - - Cultural Economics - - - Religion

    Lists

    This item is featured on the following reading lists, Wikipedia, or ReplicationWiki pages:
    1. Historical Antisemitism, Ethnic Specialization, and Financial Development (REStud 2019) in ReplicationWiki

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:restud:v:86:y:2019:i:3:p:1170-1206.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://academic.oup.com/restud .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.