Socioeconomic Inequality Across Religious Groups: Self-Selection or Religion-Induced Human Capital Accumulation? The Case of Egypt

Socioeconomic inequality across religious groups, such as between Protestants and Catholics in Western Europe, Hindus and Muslims in India, Jews and non-Jews in the US and Europe, has been the subject of a voluminous literature in social sciences and, more recently, economics. Perhaps the most well-known explanation of the phenomenon dates back to Max Weber (1930 [1905]), who traced the Protestant-Catholic socioeconomic gap to Protestantism’s culture of work ethic and individualism. Extending his thesis to Asia, Weber hypothesized in a similar vein that Asiatic religions such as Hinduism and Buddhism were less conducive to capitalism. The more recent economics of religion literature, while acknowledging the potential endogeneity of religion, attempted to disentangle the causal impact of religious beliefs on socioeconomic outcomes, first in cross-country regressions (Barro and McCleary 2003) and then in single-country studies (Borooah and Iyer 2005; Becker and Woessmann 2009; Chaudhary and Rubin 2011). A common narrative in the latter line of literature is that some religions put more emphasis than others on the accumulation of human capital.