Was Weber Wrong? A Human Capital Theory of Protestant Economic History

Becker, Sascha O. and Wößmann, Ludger (January 2007): Was Weber Wrong? A Human Capital Theory of Protestant Economic History. Discussion Papers in Economics 2007-7

Abstract

Max Weber attributed the higher economic prosperity of Protestant regions to a Protestant work ethic. We provide an alternative theory, where Protestant economies prospered because instruction in reading the Bible generated the human capital crucial to economic prosperity. County-level data from late 19th-century Prussia reveal that Protestantism was indeed associated not only with higher economic prosperity, but also with better education. We find that Protestants’ higher literacy can account for the whole gap in economic prosperity. Results hold when we exploit the initial concentric dispersion of the Reformation to use distance to Wittenberg as an instrument for Protestantism.

• Item Type: Paper
• Keywords: Human capital, Protestantism, economic history
• Faculties: Economics; Economics > Munich Discussion Papers in Economics; Economics > Munich Discussion Papers in Economics > Economic History
• Subjects: 300 Social sciences > 300 Social sciences, sociology and anthropology; 300 Social sciences > 330 Economics
• JEL Classification: N33, Z12, I20
• Language: English