The immigration–unemployment nexus: do education and Protestantism matter?

by on December 29, 2016 at 1:47 pm in Data Source, Economics, Education | Permalink

That is the title of a new paper by Jakob B. Madsen and Stojanka Andric, here is the abstract:

Using annual data from 1850 to 2010 for Argentina, Australia, Brazil, Canada, New Zealand, and the USA, this paper examines the impact of immigration and the immigrants’ educational and cultural background on unemployment. Instruments for 27 emigrating countries are used to deal with the feedback effects from unemployment to immigration. The results show that educated immigrants, in particular, and immigrants from Protestant countries significantly reduce unemployment, while poorly educated and non-Protestant immigrants enhance unemployment.

For the pointer I thank the excellent Kevin Lewis.

1 Scott Mauldin December 29, 2016 at 1:56 pm

Vindication for Weber? But correlation is not causation. Can’t get through the paywall but I doubt there’s much teasing apart of other Northern/Southern European correlations. How would protestant immigrants from catholic countries or catholic immigrants from protestant countries perform, for example?

Reply

2 Ray Lopez December 29, 2016 at 2:02 pm

The Weber thesis has been thoroughly discredited. What remains is simply ‘geography as destiny’, which we can call the Jared Diamond thesis.

Reply

3 Elan December 29, 2016 at 2:08 pm

Not discredited, but their prosperity is through investment in human capital accumulated through their higher rates of literacy not “work ethic” per se:

https://www.hks.harvard.edu/pepg/PDF/Papers/PEPG07-04_Becker_Woessmann.pdf

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 19thcentury 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.

Reply

4 Chip December 29, 2016 at 4:34 pm

Reading the bible was surely just one facet of Protestantism, where an emphasis on a personal relationship with god outside of the power structures of church and state led to a greater focus on personal responsibility and individual liberty.

This elevation of the individual at the expense of governments, kings and popes is a broad philosophical and cultural movement of which literacy is but one early success.

Reply

5 Ray Lopez December 29, 2016 at 7:24 pm

@Elan – thanks for the link, but the study is not dispositive on the issue chiefly due to small sample size: “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” – so the study is true only for “Prussia”, not for “Protestantism”. A meta study I once saw said the Weber thesis in the purest form as articulated by Weber is flawed.

Reply

6 anon December 29, 2016 at 8:28 pm

> so the study is true only for “Prussia”, not for “Protestantism”.

At the time, Prussia was ~60% of the German empire, with ~25M inhabitants. As the study notes, Prussia is a good target for the study because it had established freedom of religion early, and had large catholic and protestant populations.

7 Ray Lopez December 29, 2016 at 9:04 pm

@anon- and I’m disputing the paper’s conclusions, saying it’s inconclusive. The paper verifies Diamond’s “geography as destiny” thesis as much as it does Weber’s. “Distance to Wittenberg as an instrument for Protestantism” as the paper puts it is more an endorsement of Diamond as it is Weber.

8 Ray Lopez December 29, 2016 at 9:07 pm

@anon-put another way, there are Catholic pockets of prosperity within northern Europe that belies the Weber thesis. It could well be that the rich in Prussia were Protestant, not unlike looking at the USA’s Deep South and nothing those black folk that go to black Baptist churches are poorer than those white folk that attend Lutheran churches. It’s a spurious correlation with religion.

9 Scott Mauldin December 29, 2016 at 3:07 pm

I’m well aware, as well it should be, I’m just noting that the conclusion of this paper is rather in support of the Weber Thesis, however loosely.

Reply

10 dearieme December 29, 2016 at 4:58 pm

“How would protestant immigrants from catholic countries …”: in a hand-waving way, the Huguenots were usually deemed to have done pretty well wherever they went.

Reply

11 Jeff R December 29, 2016 at 4:08 pm

As a smart guy once pointed out, the arrow of causality probably runs the other way: protestants didn’t become prosperous because they became protestant, they became protestant because they prospered.

Reply

12 Sure December 29, 2016 at 5:42 pm

That seems highly suspect. The Italians were highly prosperous, particularly a century or two prior to the Protestant Revolution, and in spite actually going to war with the Papal States, very little progress was made by the Reformation in Italy. Likewise, Spain made huge numbers of men wealthy off the New World Conquests, but resulted in very little Protestantism outside of the Spanish Netherlands and arguably the very poor Basque regions.

On the flip side you have places like Sweden and Transylvania where the Reformation made deep inroads in spite of these territories being far less wealthy than Italy or much of Spain. Going on the wages of the populace still does not show a particularly good correlation between wealth in the 15th century and Protestantism: https://en.wiki2.org/wiki/Great_Divergence#/media/File:European_cities_real_wages.png

Milan, Vienna, and Valencia were all substantially wealthier than most Protestant cities, but none showed strong movement toward the Reformation.

Reply

13 Cliff December 29, 2016 at 10:11 pm

The “Spanish Netherlands” is Belgium, which is Catholic. Holland split away just prior and indeed is Protestant- their Protestantism sundered the classical Netherlands into Belgium and Holland and resulted in the Spanish Hapsburgs taking over Belgium.

Reply

14 Sure December 30, 2016 at 10:31 am

Belgium is Catholic today. During the 80 Years War that was not entirely the case. The Confessio Belgica was written by Guy de Bray, a Walloon, and adopted by synod in Antwerp in 1566. Antwerp was sacked in 1576 but remained majority Protestant and become a full member of the Dutch Rebellion. In 1584 the Spanish recaptured the city and forced the Protestants to emigrate, about 60% of the town moved north with a large proportion settling in Amsterdam and contributed to the latter city’s commercial ascendancy.

This pattern was repeated on a lesser scale throughout the Spanish Netherlands: there was some initial conversion to Protestantism but it was either eradicated by the Inquisition or the Protestants emigrated north. The reverse process also happen in The Netherlands where suppression of the Catholics lead to their emigration south. On the whole, this tended to impoverish the south and enrich the north.

Also I would note that the Spanish Netherlands encompassed more than Belgium – Upper Gelderland, the whole of Limburg, Artois, Cambrai, and a few other smaller territories. These also had significant Protestant activity, but they also ended up following the greater religious patterns of the states that absorbed them.

15 leonard December 29, 2016 at 6:34 pm

….the topic raised here is “unemployment”, not “prosperity”.

the suggestion is that national origin/culture much affects unemployment rates;
many other factors are ignored or minimized.

Unemployment in an unhampered market is always voluntary — an unemployed man chooses the lesser of two evils in his perception. Human labor is always a scarce and valuable resource in survival against the natural world; ready death awaits the non-laborer, save the charity of others.

In a market economy, if a person can’t find a job he prefers, he must seek other kinds of work, locations, training, or lower wages. Personality, culture and education strongly affect what trades-offs one is willing to make in seeking work; the personal choice between employment and various lengths of unemployment is also strongly affected by those factors… including cultural outlook, based on national origin.

Reply

16 JonFraz December 30, 2016 at 3:32 pm

Re: Unemployment in an unhampered market is always voluntary

Does such a thing as “an unhampered market” even exist? It sounds to me like the ‘frictionless surface” and “perfect vacuums” beloved of Physics 101 texts, but found no where in nature.

Re: ready death awaits the non-laborer, save the charity of others.

Which is why the human race went extinct eons ago because all of its non-working infants and children perished. (Or is parental care for children a form of “charity”?)
Sometimes you people need to stop and listen to what you are saying because it reduces to nonsense when compared to the real world.

Reply

17 Axa December 30, 2016 at 4:04 am

Not really, the richest lands in Germany are Catholic. Also Austria, Belgium or Japan. Perhaps the answer to prosperity is not in religion.

Reply

18 FYI December 29, 2016 at 2:11 pm

It makes sense right? A related question that I have not seen addressed is: Is it better (for them and the rest of the planet) to have smart/competent people clustered together or is it better to have them spread out? Would this mean inequality 2.0 (more and more countries becoming advanced while others fall behind?)

Reply

19 yo December 29, 2016 at 4:45 pm

Good question. Part of the answer, I think, is that the Internet has been a big game changer in that area. Before, if you wanted to learn from the best (diffusion) you had to have them around. But that meant that in turn, they couldn’t push each other so well (why do the best faculty cluster at top research institutions). Today there’s Coursera.

Reply

20 Victoria Rivero December 30, 2016 at 6:19 am

Coursera is wonderful!
Will education change the world?

Reply

21 8 December 31, 2016 at 11:57 am

Spread them out, like the British Empire did.

Reply

22 IYF December 29, 2016 at 2:18 pm

Lucky Europe then. With so many muslims immigrants. What could go wrong….

Reply

23 Lanigram December 29, 2016 at 4:03 pm

Lol! Maybe the name “Merkel” (sp?) will become a verb!

Reply

24 Borjigid December 29, 2016 at 10:00 pm

The Germans are way ahead of you: merkeln- to dither, or, more charitably, solve problems through inaction

Reply

25 y81 December 29, 2016 at 2:39 pm

This post should have had a trigger warning, since it could obviously trigger a non-Protestant. Prof. Cowen is so insensitive. I really think someone should file a complaint with the DOE.

Reply

26 Bob December 29, 2016 at 4:14 pm

Mass Protestant immigration generally started and ended during the time these frontier countries actually had frontiers and were giving away land that they wanted settled.

Reply

27 Kevin Erdmann December 29, 2016 at 4:52 pm

Shouldn’t our first estimation of the source of protestant success be the decentralized, bottom up cultural character that it implies, which would promote the sorts of institutions that support risk-taking and growth?

Reply

28 Dd0000 December 29, 2016 at 5:34 pm

Does this account for the fact that northern / cold(er) climate countries are more likely to be Protestant and have higher IQ populations? If not then it’s worthless

Reply

29 Thiago Ribeiro December 29, 2016 at 5:37 pm

I said we should have crushed the Japanese after they rebelled in 1946. An anti-Japanese Constitutional amendment failed to pass by one vote!

Reply

30 AJ December 29, 2016 at 7:06 pm

So well educated, hard working immigrants are a good thing while poorly educated immigrants who have lots of kids and low-paying jobs are bad. Isn’t that a “no duh” finding?

In the time period used, I feel like “Protestant country” can be used as a proxy for people from developed countries, mostly northern Europeans.

Reply

31 Ray Lopez December 29, 2016 at 7:16 pm

Do you believe one vote makes a difference TR? Read the below and feel free to comment (Turkey and Greece have one thing in common: the both voted to deny Israel a right to exist, LOL gotta ‘luv’ the Balkans. And why did India vote no? Ah, (Wikipedia): “India (Vote: Against): Indian Prime Minister Jawaharlal Nehru spoke with anger and contempt for the way the UN vote had been lined up. He said the Zionists had tried to bribe India with millions and at the same time his sister, Vijaya Lakshmi Pandit, had received daily warnings that her life was in danger unless “she voted right”.[76] Vijaya Lakshmi Pandit, Nehru’s sister, the Indian ambassador to the UN, occasionally hinted that something might change in favour of the Yishuv. But another Indian delegate[who?] said that India would vote for the Arab side, because of their large Moslem minority, although they knew that the Jews had a case.[77]”) – doesn’t sound right, why would an Indian pol turn down the chance to make millions? Sounds like self-righteous rhetoric to me)

https://en.wikipedia.org/wiki/United_Nations_Partition_Plan_for_Palestine

The committee voted for the plan, 25 to 13 (with 17 abstentions) on 25 November 1947 and the General Assembly was called back into a special session to vote on the proposal. Various sources noted that this was one vote short of the two-thirds majority required in the General Assembly.[53]

Reply

32 Ray Lopez December 29, 2016 at 7:18 pm

@TR was my comment, “Thiago Ribeiro December 29, 2016 at 5:37 pm
I said we should have crushed the Japanese after they rebelled in 1946. An anti-Japanese Constitutional amendment failed to pass by one vote!”

Reply

33 Thiago Ribeiro December 30, 2016 at 5:54 am

Sometimes it makes the difference between life and death.

Reply

34 Kris December 30, 2016 at 1:30 am

I don’t know what Nehru’s real (or ulterior) motives were in voting “No” on Israel. But it would have been a straightforward decision from an Indian perspective. We were in the process of freeing ourselves from European colonial rule, and the entire Zionist project looked and sounded like a European colonialist land grab (“land without a people for a people without a land” and all that.) So supporting the indigenous Palestinians’ position was a no-brainer. Also, the Zionist idea that an existing state should be partitioned along religious lines hit us too close to home; Indians had not wanted or desired Partition; only a recalcitrant Muslim minority did; most Indians were happy to live in a secular state that did not give primacy to any one religion. Strike 2 against Zionism. And lastly, though there would have been a lot of sympathy for the what the Jews had gone through, Indians would have considered the oppressors to be Europeans, so why punish the Arabs for the Holocaust?

Supporting the Zionist project back in the 1940s required two things: (1) Being rooted in an Abrahamic religious faith + a belief in Biblical mythology, and (2) Guilt for what they (and their ancestors) had put the Jews through, thereby making them responsible for providing the Jews with their own state. Only white European countries and countries that culturally identified with Europe could fit these two requirements. Anyone else who voted “Yes” was probably incentivized (or bribed) by the Americans.

Reply

35 Cliff December 30, 2016 at 3:43 pm

The number of indigenous Palestinians was quite low and there were also (very few) indigenous Jews. The great majority of the population had immigrated fairly recently. Also there was no “existing state” was there? The decision was about what to do with the territory when the British left? The alternative would have resulted in much the same thing, no?

Reply

36 Kris December 31, 2016 at 1:23 am

Was the population density really so low by the standards of typical rural agricultural communities? And my understanding is that Jews were a very low percentage of the population of Ottoman Palestine (something like 15%); am I wrong about that? I’m not saying that the Jewish settlers didn’t do better with the land than the Arabs would have done. That has self-evidently been the result, but is that sufficient justification for marginalizing the indigenous people? Isn’t that the very definition of colonization?

When the British left, Palestine would likely have been made a state in itself (like Lebanon, Syria, and Jordan), or absorbed wholly or in pieces into these neighboring Arab countries. Neither option would have involved displacement and political marginalization of the natives. But the entry of Jewish settlers into this mix changed the whole equation.

BTW…at this point, Israel is a fait accompli. And I hugely admire the country and its people for what they have achieved, given what they have gone through. But the Israelis will have to figure out the endgame they would prefer. Either make a country out of Palestine and give them enough autonomy to run their own affairs, or propose to the neighboring Arab states to incorporate Palestinians into their countries (Gaza to Egypt and the West Bank to Jordan respectively.) Their current settlement-building policy (in what the entire world apart from Israelis and neoconservative Americans) does not fulfill any goal apart from indulging the wet dreams of Jewish millenarians, and will end up corrupting and destroying the country.

Reply

37 Justin Kelly December 29, 2016 at 10:10 pm

Its problematic to assume that immigrants reflect the religion of the country they emigrated from, after all, lots of people emigrate to get away from something, such as religious refugees fleeing the majority religion of their country.

Reply

38 Urso December 30, 2016 at 10:00 am

It may be problematic, but a better question is whether it’s true. I have no opinion on the former but strongly suspect the latter. Most emigrants aren’t minorities; the clue is the definition of the word “minority”

Reply

39 dux.ie December 29, 2016 at 10:12 pm

https://www.youtube.com/watch?v=AT2wzQq7kx0 “Fleeing South Korea”

On why Korean video game programmers and rich traditional medicine practioners, 90% of them have university degrees, wanted to pick pine cone in US.

Reply

40 Duderino December 30, 2016 at 12:12 am

Something tells me “south of the Trump wall” and “not Protestant” would correlate pretty strongly.

Reply

41 TMC December 30, 2016 at 10:30 am

South of the US doesn’t though. States with most Protestants : Alabama, WV, Mississippi, Tenn.

Reply

42 Andrew M December 30, 2016 at 6:09 am

It’s the Hajnal Line again. Late marriage implies both greater human capital investment (aka education) and more work undertaken in those pre-childrearing years. “Non-Protestant” is far too large a group to draw any meaningful conclusion.

Reply

43 Hazel Meade December 30, 2016 at 12:04 pm

Two Questions:
1. Did they throw all “non-Protestants” into one bucket? Catholics, Muslims, Hindu’s together? Or did they separate them out by subgroup.

2. Did they control for the effects of religious and cultural discrimination? I.e. were these Catholic immigrants in protestant-majority countries? Did they include protestant immigrants in Catholic majority countries? One might expect that out-group immigration might increase unemployment because of in-group bias against them, regardless of the out-group immigrants’ skills or culture.

Reply

44 Shane M December 30, 2016 at 2:49 pm

“enhance unemployment” 😉

Reply

45 Keith December 31, 2016 at 9:31 am

Sola Fide

Reply

Leave a Comment

Previous post:

Next post: