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From Farmers to Merchants: A Human Capital Interpretation of Jewish Economic History

  • Maristella Botticini

    ()

    (Institute for Economic Development, Boston University)

  • Zvi Eckstein

    ()

    (Tel Avive University)

Since the Middle Ages the Jews have been engaged primarily in urban, skilled occupations, such as crafts, trade, finance and medicine. This distinctive occupational selection occurred between the seventh and the ninth centuries in the Muslim Empire and spread to other locations. We argue that this transition was the outcome of the widespread literacy among Jews prompted by an educational reform in the first century CE. Based on the growing nexus between education and Judaism in the first half of the millennium, we build a model in which Jewish men choose education, occupation, religion and location. The model predicts that when urbanization expands (as it did in the Muslim Empire), Jews move to new cities due to their comparative advantage in urban, skilled occupations. Furthermore, before urbanization a proportion of Jewish farmers are predicted to convert to other religions. The predictions of the model regarding conversions, migrations and reduction in the size of the Jewish population are consistent with historical evidence from the first millennium provided by historians. Hence, our study presents evidence for the long-term economic implications of changes in social norms.

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Paper provided by Boston University - Department of Economics in its series Boston University - Department of Economics - The Institute for Economic Development Working Papers Series with number dp-124.

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Length: 40 pages
Date of creation: Jan 2003
Date of revision:
Handle: RePEc:bos:iedwpr:dp-124
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