Abstract:
A growing corpus of literature has explored the influence of religion on economic attitudes
and behavior. The present paper investigates the effect of religion on labor market performance
using a novel approach to control for the endogeneity of religion. It proposes contingency experience,
individual experiences of existential insecurity, as an instrumental variable of a person’s religiosity.
The empirical analysis uses data from a household survey in South Africa specifically designed for
this study. The econometric approach is the estimation of instrumental variable ordered probit and
linear probability models. Using the Centrality of Religiosity Scale (CRS), the analysis differentiates
between effects of individual religious intensity and of religious affiliation. The findings show
that individual religiosity, measured in the CRS, has a robust and positive effect on labor market
performance. Religious affiliation does not seem to affect labor market performance. The positive
effect on religiosity is documented in a set of ordered and binary outcome models across different
indicators of labor market performance. The study concludes that the intensity of belief exerts
an influence on labor market attitudes and outcomes, while affiliation in religious communities
(indicating different content of belief) does not seem to make a difference.
