DP11655 Reformation and Reallocation: Religious and Secular Economic Activity in Early Modern Germany

Author(s): Davide Cantoni, Jeremiah Dittmar, Noam Yuchtman
Publication Date: November 2016
Keyword(s): Human Capital, Protestant Reformation, Sectoral Allocation
JEL(s): E02, J24, N13, N33
Programme Areas: Economic History, Macroeconomics and Growth
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=11655

The Protestant Reformation, beginning in 1517, was a first-order economic shock. We document its effects on the sectoral allocation of economic activity in Germany using highly disaggregated data. During the Reformation, particularly in Protestant regions, large numbers of monasteries were expropriated. University graduates shifted toward secular, rather than religious, occupations. Forward-looking university students shifted away from the study of religious sector-specific theology, toward secular fields. Construction activity in the religious sector declined, particularly in Protestant regions, while secular construction increased. These findings highlight the unintended consequences of the Reformation---a religious movement that contributed to Europe's secularization.