Working Paper: NBER ID: w23785
Authors: Francesco Dacunto; Marcel Prokopczuk; Michael Weber
Abstract: For centuries, Jews in Europe have specialized in financial services. At the same time, they have been the victims of historical antisemitism on the part of the Christian majority. We find that present-day financial development is lower in German counties where historical antisemitism was higher, compared to otherwise similar counties. Households in counties with high historical antisemitism have similar savings rates but invest less in stocks, hold lower bank deposits, and are less likely to get a mortgage–but not to own a house–after controlling for wealth and a rich set of current and historical covariates. Present-day antisemitism and supply-side forces do not appear to fully explain the results. Present-day households in counties where historical antisemitism was higher express lower trust in finance, but have levels of generalized trust similar to other households.
Keywords: antisemitism; financial development; ethnic specialization
JEL Codes: D91; G11; J15; N90; Z10; Z12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| historical antisemitism (B15) | lower trust in financial institutions (G21) |
| historical antisemitism (B15) | lower bank deposits (G21) |
| historical antisemitism (B15) | lower likelihood of holding mortgages (G21) |
| cultural norms of distrust in finance (Z13) | reduced financial engagement (G59) |
| present-day antisemitism (B24) | financial behaviors (G53) |
| historical antisemitism (B15) | present-day financial development (O16) |
| historical antisemitism (B15) | stock market participation (G10) |