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Dissecting the Act of God - An Exploration of the Effect of Religion on Economic Activity

Author

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  • Jean-François Carpantier

    (CREA, Université du Luxembourg)

  • Anastasia Litina

    (CREA, Université du Luxembourg)

Abstract

This research establishes that religiosity has a persistent effect on economic outcomes. First we use a sample of migrants in the US to establish that religiosity at the country of origin has a long lasting effect on the religiosity of migrants. Second, exploiting variations in the inherited component of religiosity of migrants, our analysis uncovers the causal effect of religiosity on economic activity using a panel of countries for the period 1935- 2000. The empirical findings suggest that i) church attendance has a positive impact on economic outcomes; ii) religious beliefs in the existence of god, hell, heaven and miracles have no systematic effect on economic outcomes, and iii) stronger faith is associated with prosperity. Moreover we extend our analysis to uncover the channels via which religiosity operates. Notably, the positive effect of religious participation and of stronger faith on economic outcomes operates via the creation of social capital and the development of traits, such as hard work and thrift, that are conducive to growth.

Suggested Citation

  • Jean-François Carpantier & Anastasia Litina, 2014. "Dissecting the Act of God - An Exploration of the Effect of Religion on Economic Activity," DEM Discussion Paper Series 14-09, Department of Economics at the University of Luxembourg.
    • Handle: RePEc:luc:wpaper:14-09
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    References listed on IDEAS

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    More about this item

    Keywords

    Religiosity; Growth; Beliefs; Migration; Culture;
    All these keywords.

    JEL classification:

    • A1 - General Economics and Teaching - - General Economics
    • Z12 - Other Special Topics - - Cultural Economics - - - Religion
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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