NCPA - National Center for Policy Analysis

Religious Beliefs and Economic Growth

February 5, 2004

Economists have always considered investment and savings rates, worker productivity and wage scales to determine which countries will become richer or poorer. However, recent research has shown that what really stimulates economic growth is whether you believe in an afterlife -- especially hell.

After analyzing data collected in 59 countries between 1981 and 1999, two Harvard University scholars have found religion affects economic outcomes mainly by fostering beliefs that influence individual traits such as honesty, work ethic, thrift and openness to strangers.

The researchers found that although religiosity tends to decline overall with economic development:

  • Measures of religiosity are positively related to education, negatively related to urbanization, and positively related to the presence of children.
  • Increased life expectancy tends to be negatively related with church attendance but positively related to religious beliefs.
  • There is also some indication that the stick represented by the fear of hell is more potent for growth than the carrot from the prospect of heaven.
  • Oddly enough, the research also showed that at a certain point, increases in church, mosque and synagogue attendance tended to depress economic growth; the researchers theorize that larger attendance figures could mean that religious institutions were using up a disproportionate share of resources.

The researchers believe that higher rates of religious beliefs stimulate growth because they help sustain aspects of individual behavior that enhance productivity.

Sources: Felicia Lee, "Research Around the World Links Religion to Economic Development," New York Times, January 31, 2004; based on Robert Barro and Rachel McCleary, "Religion and Economic Growth Across Countries," American Sociological Review, October 2003.

For ASR paper


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