Reallocation and secularization: the economic consequences of the Protestant Reformation
Davide Cantoni,
Jeremiah E. Dittmar and
Noam Yuchtman
LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library
Abstract:
The Protestant Reformation, beginning in 1517, was both a shock to the market for religion and a first-order economic shock. We study its impact on the allocation of resources between the religious and secular sectors in Germany, collecting data on the allocation of human and physical capital. While Protestant reformers aimed to elevate the role of religion, we find that the Reformation produced rapid economic secularization. The interaction between religious competition and political economy explains the shift in investments in human and fixed capital away from the religious sector. Large numbers of monasteries were expropriated during the Reformation, particularly in Protestant regions. This transfer of resources shifted the demand for labor between religious and secular sectors: graduates from Protestant universities increasingly entered secular occupations. Consistent with forward-looking behavior, students at Protestant universities shifted from the study of theology toward secular degrees. The appropriation of resources by secular rulers is also reflected in construction: during the Reformation, religious construction declined, particularly in Protestant regions, while secular construction increased, especially for administrative purposes. Reallocation was not driven by pre-existing economic or cultural differences.
Keywords: protestant reformation; secularization; human capital; sectoral allocation (search for similar items in EconPapers)
JEL-codes: J24 N13 N33 (search for similar items in EconPapers)
Pages: 54 pages
Date: 2017-05-17
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)
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http://eprints.lse.ac.uk/83617/ Open access version. (application/pdf)
Related works:
Working Paper: Reallocation and secularization: the economic consequences of the protestant reformation (2017) 
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:83617
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