Religion, Labor Supply, and Happiness

(Photo: Guillaume Paumier)

(Photo: Guillaume Paumier)

SuperFreakonomics looked at research by Douglas Almond and Bhashkar Mazumder on the birth effects of prenatal exposure to Ramadan. A new paper by Filipe Campante and David Yanagizawa-Drott looks at the economic effects of religious practices, a particularly relevant question this month:

We study the economic effects of religious practices in the context of the observance of Ramadan fasting, one of the central tenets of Islam. To establish causality, we exploit variation in the length of the fasting period due to the rotating Islamic calendar. We report two key, quantitatively meaningful results: 1) longer Ramadan  fasting has a negative effect on output growth in Muslim countries, and 2) it increases subjective well-being among Muslims. We then examine labor market outcomes, and find that these results cannot be primarily explained by a direct reduction in labor productivity due to fasting. Instead, the evidence indicates that Ramadan affects Muslims’ relative preferences regarding work and religiosity, suggesting that the mechanism operates at least partly by changing beliefs and values that influence labor supply and occupational choices beyond the month of Ramadan itself. Together, our results indicate that religious practices can affect labor supply choices in ways that have negative implications for economic performance, but that nevertheless increase subjective well-being among followers.

(HT: Marginal Revolution)

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  1. Voice of Reason says:

    The holiday season might lead to a temporary measure in happiness, but think of all of the happiness that’s lost throughout the rest of the year as a result of lack of productivity.

    Does Ramadan involve any gift exchange? I wonder how much the holiday season affects retail sales in Islamic countries. Could they get to a point where Ramadan is as commercialized as Christmas?

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    • gingerandgarlic says:

      Ramadan is not a holiday. It is not Islam’s version of Christmas. It’s a bit more like Lent in the run-up to Easter. It is a month of penance and reflection and, as Enter your name describes somewhere below, is a time for believers to take stock and realise that the pursuit of wealth is not the be all and end all of life.

      As far as I know (I’m a non-Muslim), gifts are not normally exchanged at the celebratory end of Ramadan, Eid al-Fitr, or Hari Raya Puasa as it is known in Singapore where I come from. Nominal gifts of cash are sometimes given by seniors to juniors, but if I’m not wrong, there is no hard and fast rule about it, and it is not a necessity.

      I have some reservations about your implied premise that productivity necessarily leads to happiness. It may be a factor, but its importance in creating happiness is something I do not think has been conclusively proven.

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    • Henry says:

      Agree with the stance but I wouldn’t have put it like that. I would be surprised that holidays and family time have no economic vlalue.

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  2. Rezoan says:

    That is quite funny and bogus research.
    These researchers havent looked on to the productivity level of Muslims for an entire year; which means they have neglected the other 11 months.
    The one month that Muslims are fasting may give some negative results interms of productivity level (slightly few; i dont find any point of doin a research) but the headstart and the spiritual uplifment Muslims get for their rest of the year do bring promising results in their work-ability and life style. These researchers have overlooked many things and gained nothing out of it.

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    • Enter your name... says:

      Actually, I think the research is right on target. It’s just that the result is not obvious from the description. The story goes like this:

      Ramadan reminds Muslims that there is something more important than money in the world. And then these Muslims actually act on that belief that economic output is not the most important thing in the world, by not chasing so hard after Mammon. They act on this belief by spending more time on things that are more important than making money, and less time on making money. They are so sincere in this belief that you can actually measure the decreased attention towards making money for me-me-me in the overall societal economic measures.

      This leads naturally to two thoughts:

      * We’ve got lots of measures for people chasing after money and trying to make themselves rich. Why don’t we have any good measurements of how good and kind and moral and ethical people are? Shouldn’t Adam Smith’s concept that “self-interest” motivates people extend beyond their self-interest in chasing after the Almighty Dollar, and towards their self-interest in having positive relationships with other humans?

      * Maybe we should require all of those unscrupulous subprime loan people to fast for a month each year, in the hope that they’ll be more interested in ethical behavior and less interested in their commission checks.

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