Instead, we follow Spenkuch’s (2017) instrumental variable approach.

However, such an instrument is likely to violate the exclusion restriction1 because it is strongly correlated with the share of German speakers. Becker and Woessmann (2009) ingeniously suggested using the distance to Wittenberg (the centre of the Protestant Reformation) as an instrument for Protestantism. To establish causality, we need to find a valid instrument. When we run simple pooled OLS, we find that the correlation between German speakers and savings per capita is strongly significant, while the correlation between Protestantism and savings remains insignificant.

Figure 2 shows the distribution of savings per capita in 1905.įigure 1 Protestants in Prussian counties, 1900Ĭlearly, the share of Protestants and the share of German speakers are correlated (especially in the east of Prussia), but not perfectly. Figure 1 shows the share of Protestants in Prussian counties for 1900. To test for this, we use a recent dataset from Lehmann-Hasemeyer and Wahl (2017) on savings per capita for Prussian counties. Weber suggested that Protestantism has led to an “accumulation of capital through ascetic compulsion to save” (Weber 1905: 191). We first revisit the evidence on the effect of Protestantism on saving behaviour. But there were huge differences between Germans and ethnic minorities, notably Poles.

Protestants were in fact neither thriftier nor more literate than Catholics. We show that the empirical literature has largely missed the context in which Weber was writing, notably the relationship between religious and ethnic differences in Germany before 1914. 2020), we revisit Weber’s famous hypothesis and the evidence for it in 19th-century Germany.

One hundred years later, sociologists and economists still debate this question in historical or contemporary settings (see Becker and Woessmann 2009, Cantoni 2015, Bai and Kung 2015, Spenkuch 2017, Alaoui and Sandroni 2018, among many others). Are Protestants thriftier or more literate than people of other beliefs, or not? Weber (1904, 1905) famously hypothesised that the Protestant work ethic fostered modern economic development through an “ascetic compulsion to save”.

Max weber the protestant ethic