Historical Antisemitism, Ethnic Specialization, and Financial Development

For centuries, Jews in Europe have specialized in financial services. At the same time, they have been the victims of historical antisemitism on the part of the Christian majority. We find that present-day financial development is lower in German counties where historical antisemitism was higher, compared to otherwise similar counties. Households in counties with high historical antisemitism have similar savings rates but invest less in stocks, hold lower bank deposits, and are less likely to get a mortgage{but not to own a house{after controlling for wealth and a rich set of current and historical covariates. Present-day antisemitism and supply-side forces do not appear to fully explain the results. Present-day households in counties where historical antisemitism was higher express lower trust in finance, but have levels of generalized trust similar to other households.

Keywords: Cultural Economics, Intergenerational Transmission of Norms, Religious Identity, Household Finance, History & Finance

JEL Classification: D91, G11, J15, N90, Z10, Z12

Suggested Citation: Suggested Citation

D'Acunto, Francesco and Prokopczuk, Marcel and Weber, Michael, Historical Antisemitism, Ethnic Specialization, and Financial Development (August 30, 2017). Becker Friedman Institute for Research in Economics Working Paper No. 2018-19, Chicago Booth Research Paper No. 17-26, Fama-Miller Working Paper , Available at SSRN: https://ssrn.com/abstract=3029643 or http://dx.doi.org/10.2139/ssrn.3029643