Religiosity and Financial Hardship

Abstract

This paper investigates whether religion shapes household financial outcomes. Using microdata from two complementary U.S. household surveys, we document that more religious households are less likely to experience financial hardship. This buffering effect holds within households over time and is most pronounced among low socioeconomic status groups. Further investigation suggests that greater religiosity lowers the likelihood of financial hardship by easing psychological distress, enhancing self-control, and providing informal insurance.

Keywords: religion, financial hardship, self-control, psychological distress, informal insurance

JEL Classification: D91, G4, G5, Z12