Believing and Practicing: How Religion Shapes Human Capital and Growth

Sebastiano Della Lena, Yasuhiro Sato and Yves Zenou
Additional contact information
Sebastiano Della Lena: Department of Economics, Monash University
Yasuhiro Sato: The University of Tokyo
Yves Zenou: Department of Economics, Monash University

No CIRJE-F-1274, CIRJE F-Series from CIRJE, Faculty of Economics, University of Tokyo

Abstract: We develop a dynamic model in which individuals allocate time between work and religious activities, and parents invest in their children’s human capital and religious belief. The model delivers, in a unified framework, the two empirical regularities doc- umented by Barro and McCleary (2003) and McCleary and Barro (2019): controlling for religious activities, stronger belief raises economic growth because it raises hu- man capital investment; controlling for belief, more time spent on religious activities lowers growth by crowding out labor supply. While the labor-supply margin is in- dividually optimal, the human-capital margin is not: parents do not internalize that greater human-capital investment crowds out future religious transmission through the socialization channel, leading to inefficiently high human capital in equilibrium under strong socialization externality. We extend this baseline framework in three directions. First, introducing a complementarity between religious belief and human capital—capturing the Protestant-ethic channel of Weber (1930)—we show that the efficiency of equilibrium depends non-monotonically on the strength of this comple- mentarity. Second, allowing for cultural conflict between two religious groups `a la Bisin and Verdier (2000), we show that cultural intolerance depresses human capital investment and, if human capital raises labor productivity, reduces economic growth. Third, embedding the model in a system of cities, we show that larger, more produc- tive cities endogenously attract workers who invest more in human capital and spend less time on religious activities, generating a negative cross-city relationship between city size and religiosity that is consistent with the empirical evidence in McCleary and Barro (2019).

Pages: 35 pages
Date: 2026-05
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.cirje.e.u-tokyo.ac.jp/research/dp/2026/2026cf1274.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tky:fseres:2026cf1274

Access Statistics for this paper

More papers in CIRJE F-Series from CIRJE, Faculty of Economics, University of Tokyo Contact information at EDIRC.
Bibliographic data for series maintained by CIRJE administrative office ().