Religion: Productive or Unproductive?
Mississippi State University - Department of Finance and Economics
Andrew T. Young
Texas Tech University - Rawls College of Business
Journal of Institutional Economics, Forthcoming
In this paper we investigate the relationships between informal institutions – proxied for by measures of religiosity – and levels of entrepreneurial activity, both productive and unproductive, using cross-section U.S. state level data. In doing so, we evaluate Baumol’s (1990) conjectures on the role of institutions in determining whether entrepreneurs will channel their efforts towards wealth-generating activities or towards zero- or negative-sum rent-seeking. We distinguish between measures of both the belief (e.g., the frequency of prayer) and belonging (e.g., church attendance) that has been stressed by authors such as Barro and McCleary (2003). We find that several religious variables significantly and negatively correlate with a state’s productive entrepreneurship score. Alternatively, most religious variables in our data do not correlate significantly with unproductive entrepreneurship. We also find that the percent of individuals reporting as atheist/agnostic is positively associated with productive entrepreneurship.
Number of Pages in PDF File: 36
Keywords: productive entrepreneurship, unproductive entrepreneurship, rent-seeking, religion, U.S. states
JEL Classification: L26, O10, O18, O51, R11, Z12
Date posted: January 30, 2013 ; Last revised: July 28, 2013