Max Weber attributed the higher economic prosperity of Protestant regions to a Protestant work ethic. We provide an alternative theory: Protestant economies prospered because instruction in reading the Bible generated the human capital crucial to economic prosperity. We test the theory using county-level data from late-nineteenth-century Prussia, exploiting the initial concentric dispersion of the Reformation to use distance to Wittenberg as an instrument for Protestantism. We find that Protestantism indeed led to higher economic prosperity, but also to better education. Our results are consistent with Protestants' higher literacy accounting for most of the gap in economic prosperity.

In an economic theory of suicide, we model social cohesion of the religious community and religious beliefs about afterlife as two mechanisms by which Protestantism increases suicide propensity. We build a unique microregional data set of 452 Prussian counties for 1816 to 1821 and 1869 to 1871, when religiousness was still pervasive. Exploiting the concentric dispersion of Protestantism around Wittenberg, our instrumental variable model finds that Protestantism had a substantial positive effect on suicide. Results are corroborated in first-difference models. Tests relating to the two mechanisms based on historical church attendance data and modern suicide data suggest that the sociological channel plays the more important role.

The interplay between religion and the economy has long occupied social scientists. We construct a unique panel of income and Protestant church attendance using 175 Prussian counties, presented in six waves from 1886 to 1911. The data reveal a marked decline in church attendance coinciding with increasing income. The cross-section also shows a negative association between income and church attendance. The associations disappear in panel analyses, including first-differenced models of the 1886 to 1911 change, panel models with county and time fixed effects, and panel Granger-causality tests. The results cast doubt on causal interpretations of the religion-economy nexus in Prussian secularization.

The role of improved schooling, a central part of most development strategies, has become controversial because expansion of school attainment has not guaranteed improved economic conditions. This paper reviews the role of cognitive skills in promoting economic well-being, with a particular focus on the role of school quality and quantity. It concludes that there is strong evidence that the cognitive skills of the population—rather than mere school attainment—are powerfully related to individual earnings, to the distribution of income, and to economic growth. New empirical results show the importance of both minimal and high level skills, the complementarity of skills and the quality of economic institutions, and the robustness of the relationship between skills and growth. International comparisons incorporating expanded data on cognitive skills reveal much larger skill deficits in developing countries than generally derived from just school enrollment and attainment. The magnitude of change needed makes clear that closing the economic gap with developed countries will require major structural changes in schooling institutions.

We use the elements of a macroeconomic production function—physical capital, human capital, labor, and technology—together with standard growth models to frame the role of religion in economic growth. Unifying a growing literature, we argue that religion can enhance or impinge upon economic growth through all four elements because it shapes individual preferences, societal norms, and institutions. Religion affects physical capital accumulation by influencing thrift and financial development. It affects human capital through both religious and secular education. It affects population and labor by influencing work effort, fertility, and the demographic transition. And it affects total factor productivity by constraining or unleashing technological change and through rituals, legal institutions, political economy, and conflict. Synthesizing a disjoint literature in this way opens many interesting directions for future research. (JEL E22, I25, J10, N30, O33, O43, Z12)

We study a mentoring program that aims to improve the labor market prospects of disadvantaged adolescents. Our randomized controlled trial investigates its effectiveness on three outcomes highly predictive of later labor market success: math grades, patience/social skills, and labor market orientation. For low-SES (socioeconomic status) adolescents, the mentoring increases a combined index of the outcomes by over half a standard deviation after 1 year, with significant increases in each outcome. Effects on grades and labor market orientation, but not on patience/social skills, persist 3 years after program start. By that time, the mentoring also improves early realizations of school-to-work transitions for low-SES adolescents. The mentoring is not effective for higher-SES adolescents.