This project will study an historical example in which social norms (in this case religious prescriptions) have had long-term implications on investment in children's education, occupational choice, migrations, and demographic patterns. The focus will be on the economic history of the Jews and the aim will be to explain why since the Middle Ages the Jews have been engaged primarily in urban, skilled occupations such as crafts, trade, money lending and medicine, and why the Jewish people were a minority in many cities and towns. To answer these questions, the research will present an extensive summary of evidence of the Jewish religion, population size, occupational distribution, economic restrictions, income by occupation, religious conversions, and migrations from the first to the twelfth century CE. The distinctive occupational selection of the Jews occurred between the seventh and the ninth centuries in the Muslim Empire and then it spread to other locations. The research will show that this transition was the outcome of the widespread literacy among Jews prompted by an educational reform in the first century CE, which made primary education compulsory for male children. Based on the growing nexus between education and Judaism in the first half of the millennium, the project will build a model in which Jewish fathers choose the level of their children's education, their own occupation, religion, and location. The model predicts that when urbanization expands (as it did in the Muslim Empire), Jews move to new cities due to their comparative advantage in urban, skilled occupations. Furthermore, before urbanization a proportion of Jewish farmers are predicted to convert to other religions. To test the theoretical results, the first part of the project will rely on the historical evidence for the first millennium provided by historians. The second part of the project will focus on the second millennium and the observed occupational distribution of the Jews from the twelfth to the seventeenth century. The following set of questions, among others, will be answered: Why did a significant proportion of Jews become moneylenders in many medieval and early-modern European cities? Was it because of the prohibitions imposed by the Church on both Christians and Jews regarding the occupations they could engage in? Was it because the Jews had an advantage because of extensive networking among themselves? Or was it the outcome of their large investment in human capital? The project will address these issues with a two-step methodology. First, it will collect data from medieval and early-modern sources to carefully reconstruct (i) the involvement of Jews and non-Jews in money lending from about 1100 to about 1600 in Italian and selected European cities and towns, and (ii) the detailed structure of Jewish money lending using micro data from primary sources for medieval and early modern Italian cities for which there are abundant data. The second step will expand Roy's model of occupational choice and migration, include the restrictions on occupations related to the questions above, and compare the predictions of the model with the historical evidence.
This research project will contribute to three strands of literature. First, it will offer a different interpretation of the economic history of the Jews in the past two millennia by showing how economic models provide a different perspective on historical facts. Second, the economic history of the Jews will offer a laboratory for studying the impact of changes in social norms on economic performance over the long run. Some economic patterns that one observes nowadays (e.g., the selection of Jews into urban, skilled jobs) have been heavily influenced by social norms, religious attitudes, and cultural values that emerged centuries ago. This can help understand different paths of economic development within and between countries, and across ethnic and religious groups. Third, the project will show that the intergenerational transmission of cultural and religious traits from parents to children (through human capital investment) can be a powerful mechanism through which societies take divergent economic trajectories.
