Economics of Religion: Lessons Learned

Carmel U. Chiswick George Washington University

ASREC Washington, DC, April 2013 Scientific Method

1. Observation • Based on available data, qualitative or quantitative

2. Theory • Thank you Azzi, Ehrenberg and Iannaccone.

3. Hypotheses

4. Empirical Tests • Using different data, new applications

5. Conclusions: Support or Modify Theory • Exciting when theory is supported. • Exciting when new Insights are gained.

C. Chiswick 2 Lessons Learned from Research: Outline of Presentation

1. Scope of the Economics of Religion (what it can and can not do)

2. Generalizing about Beliefs – Afterlife good

3. Pluralism vs. Religious Monopoly

4. Religious and secular human capital

5. Immigrant Religion and Assimilation

6. Concluding Remarks

C. Chiswick 3 Persistence over Time and Space I: Judaism’s Great Tradition

• The Great Tradition defines Judaism. It can be interpreted but not changed. – Hebrew – Torah (The Five Books of Moses, Pentateuch) • Scriptures (the Hebrew Bible) • Talmud (Mishna, Gemorra, Commentators) • Other religious literature (e.g., liturgy, Haggadah, Shulchan Aruch, Responsa) – Israel (the People, the Land)

• Includes Holidays and Rituals specified in Torah – Sabbath – Holidays: Rosh HaShanah, Yom Kipur, Passover, Shavuot (Pentecost), Sukkot – Dietary laws (kashrut)

C. Chiswick 4 Persistence over Time and Space II: Judaism’s Small Traditions

• Small Traditions are religious expressions specific to a time and place – For about 900 years most European Jews were either Ashkenazi (Yiddish) or Sephardi (Ladino) – Other Small Traditions include Mizrachi (Judeo-Arabic), Ethiopian (Amharic), Romaniote (Judeo-Greek), etc.

• Small Traditions are not shared by all Jews – Synagogue architecture & customs (e.g., seating, decorations) – Liturgy (e.g., insertions and omissions, melodies, translations) – Cuisine, traditional Sabbath and holiday foods (e.g., All Jews eat matza on Passover, but not all traditions include chicken soup with matza balls.)

C. Chiswick 5 Persistence over Time and Space III: Understanding Religious Change

• Most Jewish immigrants to the US (1850-1920) came from Ashkenaz. – Yiddish language except for ritual and Torah study. – Eastern European Ashkenazi Small Tradition suited to a very different economic environment (enclave, anti-Semitism, low secular education)

• Today’s American Judaism is a new Small Tradition – English language, sometimes even supplementing ritual and Torah study. – Reform, Conservative, Orthodox synagogue movements fit the US economic environment (high-wage, high-education, assimilated workplace and community life) – Other Small Traditions? (Ultra-Orthodox, Israeli)

• Lessons Learned – Economic environment affects Small Traditions but has little effect on the Great Tradition – Great and Small Traditions are inseparable, not always seen as distinct – Distinction relevant in times of economic change, religious transitions – Changes in Small Tradition need not imply “watering down” of religion.

C. Chiswick 6 Religion is a bundle of three economic goods.

-- Azzi & Ehrenberg

• Inseparable, but with different economic characteristics 1. Affiliation (Social Good) – Club Theory 2. Religiosity (Spiritual Good) – Theory of self-produced goods. 3. Mortality?? (Afterlife Good) – Investment beyond the lifespan – A&E focused on this motive – Puzzle: Jews highly responsive without an “Afterlife” (Ehrenberg). – Jewish “continuity” generates this investment motive.

• Evidence suggests that each is important • Choice of variable may depend on questions asked (dependent variable) • Proxy variables may be different for different religions – e.g., “Church attendance”, “belief in afterlife”, “literal interpretation of the Bible” work much better for Christians than for Jews.

C. Chiswick 7 Pluralism vs. State Religion

• Possible alternatives – Multiple official religions (Europe, Israel) • Oligopoly, Cartels •Germany: Tax rebates for the disaffiliated – Dissenting religions under the radar (Adam Smith)

• Officially Recognized Dissenting Religion (European Judaism) – Monopoly characteristics • Chief Rabbi as head of the community • Individuals are members by default – Pluralism characteristics • Congregational structure of synagogues, study houses • Competitive market for clergy • Responsa system

C. Chiswick 8 Religious vs. Secular Human Capital • Human Capital Complementarities – Secular human capital is a bundle of mutual complements. – Religious human capital may or may not be a complement. • Anti-complementarity: religious group is disadvantaged • Complementarity: successful religious groups

• Complementarities in Education – Teaching and learning methodologies (e.g., rote vs. explanation, questioning) – Curriculum content (e.g., analytical skills, creativity, literature, history)

• Insight into Jewish History (Botticini & Eckstein, The Chosen Few) – Jewish religious education included literacy in a time and place where most people were illiterate. – Jews left farming for urban occupations where literacy complemented secular skills. (Religion as a factor in occupational clustering)

C. Chiswick 9 Immigrant Religion and Assimilation

• Religious human capital can be transferable or country- specific – Transferability depends on complementarity between religious and secular human capital in each country – Religious adaptions raise complementarity between religious and secular human capital

• The same model applies to changes over time in the economic environment – New technological era (Economic Development) – New types of secular education (Transformative) – New wage levels (incentives to invest in religious human capital)

C. Chiswick 10 “Policy” Conclusions

1. Great vs. Small Tradition • Helpful perspective for coping with major changes. 2. Religious and secular human capital • Complementarities in educational methods, • Complementarities with values, skills relevant to society and workplace. 3. Immigrant Religion and Assimilation • Assimilation enhances complementarities and reduces conflicts. • Balancing tradition and change 4. Pluralism vs. Religious Monopoly • Understanding religious freedom 5. Spiritual, Social, & “Afterlife” Goods • Religiosity, Affiliation, & “Mortality” respond to different economic influences. • Measurement requires religion-specific or religion-neutral proxy variables.

C. Chiswick 11