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

Citation

Becker S & Woessmann L (2009) Was Weber Wrong? A Human Capital Theory of Protestant Economic History. The Quarterly Journal of Economics, 124 (2), pp. 531-596. https://doi.org/10.1162/qjec.2009.124.2.531

Abstract
Max Weber attributed the higher economic prosperity of Protestant regions to a Protestant work ethic. We provide an alternative theory: Protestant economies prospered because instruction in reading the Bible generated the human capital crucial to economic prosperity. We test the theory using county-level data from late 19th-century Prussia, exploiting the initial concentric dispersion of the Reformation to use distance to Wittenberg as an instrument for Protestantism. We find that Protestantism indeed led to higher economic prosperity, but also to better education. Our results are consistent with Protestants’ higher literacy accounting for most of the gap in economic prosperity.

Keywords
Human capital; Protestantism; economic history of Prussia; JEL classification: N33, Z12, I20; Weber, Max, 1864-1920 Criticism and interpretation; Capitalism Religious aspects Protestant churches; Prussia (Germany) Economic conditions 19th century; Protestantism; Church and education Prussia (Germany)

Journal
The Quarterly Journal of Economics: Volume 124, Issue 2