Does Religion Affect Economic Growth and Happiness? Evidence from Ramadan

Filipe Campante and David Yanagizawa-Drott

No 19768, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We study the economic effects of religious practices in the context of the observance of Ramadan fasting, one of the central tenets of Islam. To establish causality, we exploit variation in the length of the fasting period due to the rotating Islamic calendar. We report two key, quantitatively meaningful results: 1) longer Ramadan fasting has a negative effect on output growth in Muslim countries, and 2) it increases subjective well-being among Muslims. We then examine labor market outcomes, and find that these results cannot be primarily explained by a direct reduction in labor productivity due to fasting. Instead, the evidence indicates that Ramadan affects Muslims' relative preferences regarding work and religiosity, suggesting that the mechanism operates at least partly by changing beliefs and values that influence labor supply and occupational choices beyond the month of Ramadan itself. Together, our results indicate that religious practices can affect labor supply choices in ways that have negative implications for economic performance, but that nevertheless increase subjective well-being among followers.

JEL-codes: E20 J20 O40 O43 Z12 (search for similar items in EconPapers)
Date: 2013-12
New Economics Papers: this item is included in nep-gro, nep-hap and nep-mac
Note: DEV EFG POL
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Citations: View citations in EconPapers (17)

Published as Filipe Campante & David Yanagizawa-Drott, 2015. "Does Religion Affect Economic Growth and Happiness? Evidence from Ramadan," The Quarterly Journal of Economics, Oxford University Press, vol. 130(2), pages 615-658.

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Working Paper: Does Religion Affect Economic Growth and Happiness? Evidence from Ramadan (2013)
Working Paper: Does Religion Affect Economic Growth and Happiness? Evidence from Ramadan (2013)
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