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The Implications of Cultural Background on Labour Market Choices: The Case of Religion and Entrepreneurship

  • Nunziata, Luca

    ()

    (University of Padova)

  • Rocco, Lorenzo

    ()

    (University of Padova)

We suggest a methodology for identifying the implications of alternative cultural and social norms embodied by religious denomination on labour market outcomes, by estimating the differential impact of Protestantism versus Catholicism on the propensity to be an entrepreneur, on the basis of the diverse minority status of both confessions across European regions. Our quasi-experimental research design exploits the stronger degree of attachment to religious ethic of religious minorities and the exogenous historical determination of the geographical distribution of religious minorities in Europe. Our analysis of European Social Survey data collected in four waves between 2002 and 2008 in 22 European countries, indicates that cultural background has a significant effect on the individual propensity to become an entrepreneur, with Protestantism increasing the chances to be an entrepreneur by around 3% with respect to Catholicism. Our findings, stable across a number of robustness checks, provide further evidence on the need to take cultural elements into consideration when analysing economic behaviour.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6114.

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Length: 80 pages
Date of creation: Nov 2011
Date of revision:
Handle: RePEc:iza:izadps:dp6114
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  1. Guido Tabellini, 2006. "Culture and institutions: economic development in the regions of Europe," Levine's Working Paper Archive 321307000000000466, David K. Levine.
  2. Minns, Chris & Rizov, Marian, 2005. "The spirit of capitalism? Ethnicity, religion, and self-employment in early 20th century Canada," Explorations in Economic History, Elsevier, vol. 42(2), pages 259-281, April.
  3. Sascha O. Becker & Ludger Woessmann, 2007. "Was Weber Wrong? A Human Capital Theory of Protestant Economic History," CESifo Working Paper Series 1987, CESifo Group Munich.
  4. Guido Tabellini, 2008. "Presidential Address Institutions and Culture," Journal of the European Economic Association, MIT Press, vol. 6(2-3), pages 255-294, 04-05.
  5. David B. Audretsch & Werner Boente & Jagannadha Pawan Tamvada, 2007. "Religion and Entrepreneurship," Jena Economic Research Papers 2007-075, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  6. Laurence R. Iannaccone, 1998. "Introduction to the Economics of Religion," Journal of Economic Literature, American Economic Association, vol. 36(3), pages 1465-1495, September.
  7. Alberto Bisin & Giorgio Topa & Thierry Verdier, 2004. "Religious Intermarriage and Socialization in the United States," Journal of Political Economy, University of Chicago Press, vol. 112(3), pages 615-664, June.
  8. Blanchflower, D.G. & Oswald, A., 1991. "What Makes an Entrepreneur?," Economics Series Working Papers 99125, University of Oxford, Department of Economics.
  9. Jörg L. Spenkuch, 2010. "The Protestant Ethic and Work: Micro Evidence from Contemporary Germany," SOEPpapers on Multidisciplinary Panel Data Research 330, DIW Berlin, The German Socio-Economic Panel (SOEP).
  10. Laurence R. Iannaccone, 1998. "Corrigenda [Introduction to the Economics of Religion]," Journal of Economic Literature, American Economic Association, vol. 36(4), pages 1941-1941, December.
  11. Jonathan Gruber & Daniel M. Hungerman, 2006. "The Church vs the Mall: What Happens When Religion Faces Increased Secular Competition?," NBER Working Papers 12410, National Bureau of Economic Research, Inc.
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