Personal Liberties, Religiosity, and Effort

• Authors: Laura Mayoral and Joan-Maria Esteban.
• political economy
• European Economic Review

In this paper, we study the role of religiosity in influencing the choice of labor effort. Many religions promote restrictions on personal liberties such as divorce, abortion, gender parity, or gay marriage, often regulated by law. We assume that the higher the degree of religiosity of an individual, the less he enjoys such personal liberties, and the less he likes to be in a society which allows them, while seculars enjoy such liberties. By standard consumer theory, the differential valuation induced by religiosity influences individual decisions on other dimensions as well, notably labour supply. We show empirically that this nexus holds and that the size of the effect is large. Specifically, we construct an index of personal liberties and find solid evidence in support of the joint effect of religiosity and liberties on labor effort. Our empirical results indicate that religiosity interacted with the legal level of liberties has a significant and strong negative effect on labor supply and that increases in the cap on liberties have a negative effect on the labor supply of the religious individuals and positive for the secular.