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From Farmers to Merchants, Voluntary Conversions and Diaspora: A Human Capital Interpretation of Jewish History

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  • Botticini, Maristella
  • Eckstein, Zvi

Abstract

From the end of the second century C.E., Judaism enforced a religious norm requiring any Jewish father to educate his children. We present evidence supporting our thesis that this exogenous change in the religious and social norm had a major influence on Jewish economic and demographic history. First, the high individual and community cost of educating children in subsistence farming economies (2nd to 7th centuries) prompted voluntary conversions, which account for a large share of the reduction in the size of the Jewish population from about 4.5 million to 1.2 million. Second, the Jewish farmers who invested in education, gained the comparative advantage and incentive to enter skilled occupations during the vast urbanization in the newly developed Muslim Empire (7th and 8th centuries) and they actually did select themselves into these occupations. Third, as merchants the Jews invested even more in education - a pre-condition for the extensive mailing network and common court system that endowed them with trading skills demanded all over the world. Fourth, the Jews generated a voluntary diaspora by migrating within the Muslim Empire, and later to western Europe where they were invited to settle as high skill intermediaries by local rulers. By 1200, the Jews were living in hundreds of towns from England and Spain in the West to China and India in the East. Fifth, the majority of world Jewry (about one million) lived in the Near East when the Mongol invasions in the 1250s brought this region back to a subsistence farming economy in which many Jews found it difficult to enforce the religious norm regarding education, and hence, voluntarily converted, exactly as it had happened centuries earlier.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 5571.

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Date of creation: Mar 2006
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Handle: RePEc:cpr:ceprdp:5571

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Keywords: human capital; Jewish economic and demographic history; migration; occupational choice; religion; social norms;

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  1. repec:iza:izadps:dp483 is not listed on IDEAS
  2. Kremer, Michael, 1993. "Population Growth and Technological Change: One Million B.C. to 1990," The Quarterly Journal of Economics, MIT Press, vol. 108(3), pages 681-716, August.
  3. Timur Kuran, 1997. "Islam and Underdevelopment: An Old Puzzle Revisited," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 153(1), pages 41-, March.
  4. Temin, Peter, 1997. "Is it Kosher to Talk about Culture?," The Journal of Economic History, Cambridge University Press, vol. 57(02), pages 267-287, June.
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As found by EconAcademics.org, the blog aggregator for Economics research:
  1. The myth of the Protestant work ethic
    by chris dillow in Stumbling and Mumbling on 2007-02-05 16:23:59
  2. Some benefits of religion
    by chris dillow in Stumbling and Mumbling on 2013-02-10 13:54:16
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Cited by:
  1. Antonio Romero Medina & Mateo Triossi, 2007. "Games of capacities : a (close) look to Nash Equilibria," Economics Working Papers we075933, Universidad Carlos III, Departamento de Economía.
  2. Maristella Botticini & Zvi Eckstein, 2006. "Path Dependence and Occupations," Carlo Alberto Notebooks 3, Collegio Carlo Alberto.
  3. Gradstein, Mark, 2008. "Endogenous Reversals of Fortune," IZA Discussion Papers 3469, Institute for the Study of Labor (IZA).
  4. Sascha O. Becker & Ludger Woessmann, 2009. "Was Weber Wrong? A Human Capital Theory of Protestant Economic History," The Quarterly Journal of Economics, MIT Press, vol. 124(2), pages 531-596, May.
  5. Maria Saez-Marti & Fabrizio Zilibotti, 2008. "Preferences as Human Capital: Rational Choice Theories of Endogenous Preferences and Socioeconomic Changes," Finnish Economic Papers, Finnish Economic Association, vol. 21(2), pages 81-94, Autumn.
  6. Iyigun, Murat, 2006. "Ottoman Conquests and European Ecclesiastical Pluralism," IZA Discussion Papers 1973, Institute for the Study of Labor (IZA).
  7. Michalopoulos, Stelios, 2008. "The Origins of Ethnolinguistic Diversity: Theory and Evidence," MPRA Paper 11531, University Library of Munich, Germany.
  8. Iyigun, Murat, 2007. "Monotheism (From a Sociopolitical and Economic Perspective)," IZA Discussion Papers 3116, Institute for the Study of Labor (IZA).
  9. Iyigun, Murat, 2008. "Lessons from the Ottoman Harem (On Ethnicity, Religion and War)," IZA Discussion Papers 3556, Institute for the Study of Labor (IZA).

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