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Was Weber Wrong? A Human Capital Theory of Protestant Economic History

Author

Listed:
  • Becker, Sascha O.

    (Monash University)

  • Woessmann, Ludger

    (University of Munich)

Abstract
Max Weber attributed the higher economic prosperity of Protestant regions to a Protestant work ethic. We provide an alternative theory, where Protestant economies prospered because instruction in reading the Bible generated the human capital crucial to economic prosperity. County-level data from late 19th-century Prussia reveal that Protestantism was indeed associated not only with higher economic prosperity, but also with better education. We find that Protestants’ higher literacy can account for the whole gap in economic prosperity. Results hold when we exploit the initial concentric dispersion of the Reformation to use distance to Wittenberg as an instrument for Protestantism.

Suggested Citation

  • Becker, Sascha O. & Woessmann, Ludger, 2007. "Was Weber Wrong? A Human Capital Theory of Protestant Economic History," IZA Discussion Papers 2886, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp2886
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    More about this item

    Keywords

    human capital; Protestantism; economic history;
    All these keywords.

    JEL classification:

    • 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
    • I20 - Health, Education, and Welfare - - Education - - - General

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