The Protestant Ethic and Entrepreneurship: Evidence from Religious Minorities from the Former Holy Roman Empire

Nunziata, Luca and Rocco, Lorenzo (2014): The Protestant Ethic and Entrepreneurship: Evidence from Religious Minorities from the Former Holy Roman Empire.

Abstract

We propose a new methodology for identifying the causal effect of Protestantism versus Catholicism on the decision to become an entrepreneur. Our quasi-experimental research design exploits religious minorities' strong attachment to religious ethics and the exogenous historical determination of religious minorities' geographical distribution in the regions of the former Holy Roman Empire in the 1500s. We analyse European Social Survey data, collected in four waves between 2002 and 2008, and find that religious background has a significant effect on the individual propensity for entrepreneurship, with Protestantism increasing the probability to be an entrepreneur by around 5 percentage points with respect to Catholicism. Our findings are stable across a number of robustness checks, including accounting for migration patterns and a placebo test. We also provide an extended discussion of the assumptions' validity at the basis of our research design. This paper is one of the first attempts to identify a causal effect, rather than a simple correlation, of religious ethics on economic outcomes.

• Item Type: MPRA Paper
• Language: English
• Keywords: Entrepreneurship, Religion, Culture, Protestantism, Catholicism.
• Subjects: J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J21 - Labor Force and Employment, Size, and Structure; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J24 - Human Capital ; Skills ; Occupational Choice ; Labor Productivity; Z - Other Special Topics > Z1 - Cultural Economics ; Economic Sociology ; Economic Anthropology > Z12 - Religion; Z - Other Special Topics > Z1 - Cultural Economics ; Economic Sociology ; Economic Anthropology > Z13 - Economic Sociology ; Economic Anthropology ; Social and Economic Stratification

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