Was Weber Wrong? A Human Capital
Theory of Protestant Economic History, by
Sascha Becker & Ludger Woessmann:
Max Weber attributed the higher economic prosperity of Protestant regions to a
Protestant work ethic. We provide an alternative theory, where Protestant
economies prospered because instruction in reading the Bible generated the human
capital crucial to economic prosperity. County-level data from late 19th century
Prussia reveal that Protestantism was indeed associated not only with higher
economic prosperity, but also with better education. We find that Protestants’
higher literacy can account for the whole gap in economic prosperity. Results
hold when we exploit the initial concentric dispersion of the Reformation to use
distance to Wittenberg as an instrument for Protestantism.
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