May 19, 2022

Economix: The Economics of a Vengeful Deity

Naomi Schaefer Riley continues the discussion of religion and income at the Chronicle of Higher Education’s Brainstorm blog:

[A] religion’s view of education affect one’s education and therefore one’s income….

It’s not that one religion mandates a college education and another one suggests only high school. Sometimes religious leaders do talk about such issues. But it goes back even further than that. Pentecostals and Jehovah’s Witnesses and some other fundamentalist Protestants (not evangelicals generally, mind you) have a more apocalyptic view of the world. That is, they think the end may be coming soon and so planning for the future (through education, savings, etc.) seems less important.

In their book, “America’s Four Gods,” Paul Froese and Christopher Bader write about the effect that people’s view of the divine has on their financial prospects. Americans, in the authors’ view, are divided into people who view God as an active or inactive presence and as either a benevolent or vengeful God. People who view God as both active and mean often have lower incomes. It’s a little hard to separate the cause and effect here. Do you believe God has it in for you because you have a low income or do you have a low income because you don’t believe you have much chance of doing well in this lifetime[?]

Two other small points about our chart on religion, education and income:

First, several readers have asked why we did not include Orthodox Jews. Our chart was based on a survey by the Pew Forum on Religion and Public Life, and the survey simply did not turn up enough Orthodox Jews for the Pew researchers to be confident in the results for that category.

Second, the original version of our chart contained an error. It incorrectly placed the data point for “Seculars” (a combination of atheists, agnostics and “secular unaffiliated”); 35 percent are college graduates, not 45 percent. Now that the chart has been fixed, Seculars no longer look like a modest outlier, earning somewhat less than their education would predict. They’re right in line with most other religions, modestly more educated and affluent than Methodists and modestly less so than Presbyterians.

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Economix: Geography, Income and Religion

In response to my column on religion and income (and my follow-up post on Economix), several readers have asked whether geography plays a big role. As one reader wrote, “Jews (and Asians) live primarily on the coasts, where above average incomes are earned (and needed).” The implication here is that Jews and Hindus aren’t the most affluent religions largely because they’re the most educated; according to this view, much of their affluence instead stems from the fact that they tend to live in expensive, high-income metropolitan areas, like New York, San Francisco, Washington and Boston.

I think this argument mixes up cause and effect. New York and San Francisco are not expensive cities because of something in the local water or some random factor. They are expensive cities because a lot of people making high incomes live there. And the No. 1 reason those cities have so many high-income people is that they have so many highly skilled, highly educated and thus highly productive workers.

Yes, it’s true that not all of the cost-of-living difference stems from difference in productivity. If you took typical workers from an inexpensive city and told them to find new work in San Francisco, they probably would receive a raise — even though their qualifications would obviously have been the same in the two places. But even this difference stems in part from the higher productivity of urban workers.

Here is Edward L. Glaeser — Harvard professor, economic-growth expert and former contributor to this blog — writing in his recent book, “Triumph of the City”:

Recent research also finds that productivity is significantly higher for firms that locate near the geographic center of inventive activity in their industry…

Workers in big cities earn about 30 percent more than their nonurban equivalents, but people who come to urban areas don’t experience higher wage gains overnight.

Year-by-year, workers in cities have higher wage growth, as they accumulate the skills that make them successful.

Wage growth is particularly faster in cities with more skilled workers. Two decades of extra job-market experience is associated with 10 percent more wage growth in skilled metropolitan areas than in nonmetropolitan America, but only 3 percent more wage growth in less skilled metropolitan areas.

New Yorkers and San Franciscans aren’t richer because they happen to have chosen to live in expensive cities. New York and San Francisco are expensive largely because they have attracted so many highly productive jobs. As Mr. Glaeser and other economists have pointed out, nothing breeds productivity quite like education.

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