NCPA - National Center for Policy Analysis


November 29, 2005

There is a "very strong positive correlation" between religious market density, religious participation and positive economic outcomes," says National Bureau of Economic Research Associate Jonathan Gruber.

He found that:

  • People living in an area with a higher density of co-religionists have higher incomes, they are less likely to be high school dropouts, and more likely to have a college degree."
  • Living in such an area also reduces the odds of receiving welfare, decreases the odds of being divorced, and increases the odds of being married. The effects can be substantial.
  • Doubling the rate of religious attendance raises household income by 9.1 percent, decreases welfare participation by 16 percent from baseline rates, decreases the odds of being divorced by 4 percent, and increases the odds of being married by 4.4 percent.

Gruber concludes that being in an area with more co-religionists leads to better economic outcomes through the channel of increased religious participation. Although he does not investigate the mechanism through which religiosity creates these results, Gruber suggests four possibilities:

  • Religious attendance increases the number of social interactions in a way peculiar to religious settings
  • Religious institutions provide financial and emotional "insurance" that help people mitigate their losses when setbacks occur
  • Attendance at religious schools may be an advantage.
  • Religious faith may simply improve well-being directly by enabling the faithful to be "less stressed out" by the problems of every day life.

Source: Linda Gorman, "Is Religion Good for You?" NBER Digest, October 2005; based upon: Jonathan Gruber, "Religious Market Structure, Religious Participation, and Outcomes: Is Religion Good for You?" National Bureau of Economic Research, Working Paper No. 11377, May 2005.

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