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Don’t Stop Thinking about the Money

Follow the money – and the time, and the educational and health outcomes.

In a world consumed by financial concerns, the rising star of the Association for the Study of Religion, Economics and Culture is providing a wealth of data to gauge the investments people make in faith.

From its inception in 2002, when a small group of scholars met as part of the annual meeting of the Society for the Scientific Study of Religion, the organization has grown to where more than 180 people gathered recently for the association’s annual conference in Crystal City, Va.

For more than a century, scholars in fields from archaeology to anthropology have included the study of religion in their disciplines.

“Economists have been missing in action,” said Laurence Iannaccone of George Mason University, founder of the association on religion and economics. “But that’s changed in the last 20 years.”

Iannaccone said one reason for the change is that “contrary to the expectations of generations of intellectuals … religion remains a tremendously potent political and social force.”

So, does placing time, talent and treasure in spiritual pursuits pay off? For many people, the answer is yes.

Among the findings shared at the association meeting, researchers reported that children whose parents were observant tended to stay in school longer and get better jobs and that the poor in particular find religion a beneficial use of their time.

Faith also extends to financial matters, with investors in religious mutual funds being less likely to react to market volatility even with lower returns than secular funds.

There also is an economic downside for religious groups, however. Studies indicated that a rise in the welfare state contributed to steep declines in religiosity among some Western democracies and that the well-off are more likely than their less fortunate brethren to spend time at work and play than at prayer.

Farewell ‘rice Christians’

Follow the government money.

Contrary to the beliefs of some secular scholars, greater education and rising personal incomes did not cause religion to fade away in developed nations, according to a study on “The Decrease in Religiosity in the 20th Century”

Instead, Raphael Franck of Bar-Ilan University in Israel and Iannaccone point to the rise of the welfare state as a significant factor in the drop-off in some European nations.

Their study found little evidence that higher levels of education or growth in the Gross Domestic Product of 10 Western nations, including the United States, led to less church participation. Contrary to secularization theories, there was some evidence of a positive relation in both areas.

The authors contend the growth in public spending on education and old-age expenditures led to a decline in religiosity in nations such as Switzerland and Sweden and Great Britain. The welfare state took over services provided by the churches and made religious participation less valuable, the authors said.

One reason the United States has not followed the same pattern but remained relatively stable in religious participation, Iannaccone said, is the public safety net has grown much more dramatically in many European nations.

Explore the ARDA’s profiles of international religion]

Rising incomes sink prayer lives

There is an old joke about a rich man telling his pastor that he was able to tithe 10 percent of his income when we was making $50 a week and even when his income rose to $500 a week. But he could not bring himself to give so much money away now that he was making $5,000 a week. The pastor’s response was to pray: “God, help this man make $50 a week.”

The joke comes to mind in response to a study on “Rational Praying: The Economics of Prayer” that finds individuals begin to pray less when they earn around $90,000 a year or more.

Timothy Brown, a researcher at the University of California at Berkeley, finds a negative correlation between income and prayer in his analysis of General Social Survey data from 1996, 1998, 2000, 2002 and 2004. Women respondents were found to pray one less prayer a week as their income reached $87,160 a year, while men reported a downward trend at $90,700 a year.

One explanation, Brown said, is that the poor and the unemployed may have a greater need for prayer, while the benefit may be lower for higher-income individuals who have relative economic security and may place a higher value on time spent at work or play.

Examine the ARDA’s QuickStats on prayer

Observant parents boost college, professional ranks

Going to church may not get your kid into Harvard, but it could pay later in terms of education and job possibilities.

In their paper “Mom and Dad Took Me to Church,” Wafa Hakim Orman of the University of Alabama, Charles North of Baylor University and Carl Gwin of Pepperdine University found people who attended church with their parents as children were more likely to get a better education and, in some cases, gravitate toward higher-end jobs.

In one survey, about two-thirds of those studied who had at least a college degree said their mother attended church often, while only 49 percent of high school graduates had an observant mother. Fifty-one percent of people who have done postgraduate work said both parents attended often, compared with 34 percent of high school graduates.

Greater education, in turn, led many to better jobs. Sixty-two percent of people in high-education occupations said their mothers attended service at least twice a month. Forty-six percent said both parents were observant.

The authors, relying on 2005 and 2006 data from the Baylor Religion Survey and the National Longitudinal Survey of Youth that started in 1979, also report that families seem to be aware of the benefits of churchgoing, “whether consciously or at a purely intuitive level.” More than half of parents in high-education occupations attend services twice a month, double the rate of frequent attendance of people without children who are similarly employed.

Find the Baylor Religion Survey in the ARDA’s Data Archive

Mutual funds saved by faith

Money is not everything for investors in religious mutual funds.

In a study of open-end mutual funds from 1991-2007, Jared Peifer of Cornell University found a remarkable degree of investor loyalty in religious funds despite generally lower returns than conventional mutual funds.

Investors still want their funds to show them the money, adding more money in good times and taking it out in bear markets. But particularly in comparison to investors in non-religious socially responsible mutual funds, those putting money into religious funds stay committed, Peifer found.

For each percentage point drop in returns, investors in religious funds withdrew an average one-tenth of a percent of money from the fund, Peifer said. Investors in conventional mutual funds that are purely interested in profit and not in screening for concerns from abortion to pornography to the environment, withdrew three-tenths of a percent. Investors in non-religious socially responsible funds punished poor performance with a fund outflow of 1.19 percent.

Peifer says the analysis suggests that religious morality can impact financial behavior, and that at least some religious investors seem willing to make a financial sacrifice in return “for doing the morally responsible thing.”

Unfettered greed is not good. Moral responsibility. What novel concepts for the American economy.

Papers and abstracts from the 2009 meeting of the Association for Religion, Economics and Culture are available at http://www.religionomics.com/asrec/index.html.

— David Briggs

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