Working Paper: CEPR ID: DP17719
Authors: Tiago Cavalcanti; Sriya Iyer; Christopher Rauh; Christian Roerig
Abstract: Using primary data from Brazil in 2019-2020, we quantify the link between reli-gion, expectations and economic outcomes, suggesting a key complementarity that for religious networks to provide insurance in this life one also needs strong beliefs in the afterlife. Individuals invest more in their religious communities if they can also expect various forms of community support. The degree of this insurance channel varies across different religions and is highest for Pentecostals. Consistent with this, we build a lifecycle model with heterogeneous agents, imperfect insurance and afterlife beliefs.We discipline the value of model parameters with our data and show that under certain parameterizations the job support channel exists as a by-product of coordinated beliefs in the afterlife. Our results provide evidence that insurance by the community would not be enough to induce religious investments. It is complementarity with beliefs in the afterlife which raises the returns of religious investments above the threshold. The community support and afterlife channel together provide an average value worth 9.6%of consumption in each year.
Keywords: religiosity; religion; insurance; unemployment; brazil
JEL Codes: Z12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| afterlife beliefs (Z12) | community investment (O35) |
| afterlife beliefs (Z12) | community support (D16) |
| community investment (O35) | community support (D16) |
| afterlife beliefs (Z12) | job support (J68) |
| community support (D16) | job support (J68) |
| afterlife beliefs (Z12) | insurance effectiveness (G52) |
| community support (D16) | insurance for low-income individuals (G52) |
| afterlife beliefs (Z12) | community support diminishment (I32) |