Religion and Financial Hardship
51 Pages Posted: 25 Apr 2024 Last revised: 1 Apr 2025
Date Written: April 23, 2024
Abstract
This paper investigates whether religion shapes household financial outcomes. To address selection into religiosity, we employ an instrumental variable strategy that exploits arguably exogenous within-school, cross-cohort variation in peer influences during adolescence. We document that more religious households are less likely to experience financial hardship. This buffering effect is most pronounced among low socioeconomic status groups. Further investigation reveals that greater religiosity lowers the likelihood of financial hardship by improving patience, enhancing self-control, and easing psychological distress.
Keywords: religion, financial hardship, self-control, psychological distress
JEL Classification: D91, G4, G5, Z12
Suggested Citation: Suggested Citation