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Was Weber Wrong? A Human Capital Theory of Protestant Economic History

  • Sascha O. Becker

    (University of Stirling, Ifo Institute, CESifo, and Institut zur Zukunft der Arbeit.)

  • Ludger Woessmann

    (University of Munich, Ifo Institute, CESifo, and Institut zur Zukunft der Arbeit.)

Max Weber attributed the higher economic prosperity of Protestant regions to a Protestant work ethic. We provide an alternative theory: Protestant economies prospered because instruction in reading the Bible generated the human capital crucial to economic prosperity. We test the theory using county-level data from late-nineteenth-century Prussia, exploiting the initial concentric dispersion of the Reformation to use distance to Wittenberg as an instrument for Protestantism. We find that Protestantism indeed led to higher economic prosperity, but also to better education. Our results are consistent with Protestants' higher literacy accounting for most of the gap in economic prosperity. (c) 2009 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology..

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Article provided by MIT Press in its journal Quarterly Journal of Economics.

Volume (Year): 124 (2009)
Issue (Month): 2 (May)
Pages: 531-596

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Handle: RePEc:tpr:qjecon:v:124:y:2009:i:2:p:531-596
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