Working Paper: NBER ID: w19768
Authors: Filipe R. Campante; David H. Yanagizawadrott
Abstract: 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.
Keywords: Religion; Economic Growth; Happiness; Ramadan
JEL Codes: E20; J20; O40; O43; Z12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| longer Ramadan fasting (C41) | output growth (O40) |
| longer Ramadan fasting (C41) | subjective well-being (I31) |
| decrease in output growth (O49) | shift in labor supply (J29) |
| longer Ramadan fasting (C41) | changes in beliefs and values regarding work and religiosity (Z12) |