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Did Protestantism promote economic prosperity via higher human capital?

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  • Edwards, Jeremy

Abstract

This paper investigates the Becker-Woessmann (2009) argument that Protestants were more prosperous in nineteenth-century Prussia because they were more literate, a version of the Weber thesis, and shows that it cannot be sustained. The econometric analysis on which Becker and Woessman based their argument is fundamentally flawed, because their instrumental variable does not satisfy the exclusion restriction. When an appropriate instrumental-variable specification is used, the evidence from nineteenth-century Prussia rejects the human-capital version of the Weber thesis put forward by Becker and Woessmann.

Suggested Citation

  • Edwards, Jeremy, 2017. "Did Protestantism promote economic prosperity via higher human capital?," MPRA Paper 82346, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:82346
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    1. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2003. "Instrumental variables and GMM: Estimation and testing," Stata Journal, StataCorp LP, vol. 3(1), pages 1-31, March.
    2. Sascha O. Becker & Ludger Woessmann, 2009. "Was Weber Wrong? A Human Capital Theory of Protestant Economic History," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(2), pages 531-596.
    3. Daron Acemoglu & Davide Cantoni & Simon Johnson & James A. Robinson, 2011. "The Consequences of Radical Reform: The French Revolution," American Economic Review, American Economic Association, vol. 101(7), pages 3286-3307, December.
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    6. Sanderson, Eleanor & Windmeijer, Frank, 2016. "A weak instrument F-test in linear IV models with multiple endogenous variables," Journal of Econometrics, Elsevier, vol. 190(2), pages 212-221.
    7. Davide Cantoni, 2012. "Adopting a New Religion: the Case of Protestantism in 16th Century Germany," Economic Journal, Royal Economic Society, vol. 122(560), pages 502-531, May.
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    14. Edwards, Jeremy, 2018. "A replication of "Education and catch-up in the industrial revolution" (American Economic Journal: Macroeconomics, 2011)," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 12, pages 1-33.
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    Cited by:

    1. Michael Wyrwich, 2018. "The effect of being Protestant on entrepreneurial choice," Jena Economics Research Papers 2018-010, Friedrich-Schiller-University Jena.

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    More about this item

    Keywords

    Human capital; Protestantism; economic history; instrumental variables;
    All these keywords.

    JEL classification:

    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
    • I20 - Health, Education, and Welfare - - Education - - - General
    • N33 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Europe: Pre-1913
    • Z12 - Other Special Topics - - Cultural Economics - - - Religion

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