Religious and secular human capital: An economic model

Gideon Hollander, Nava Kahana, Tikva Lecker

Research output: Contribution to journalArticlepeer-review

7 Scopus citations


Traditional theories have explained religious behavior in terms of primitive thought, neurotic impulses and social conditioning rather than rational self-interest. Recent evidence, however, suggests that religious involvement can be justified by standard economic theories of rationality; that religious and secular human capital are complementary inputs in generating income; that religious studies have a direct effect on utility; and that such studies induce positive externalities. On the basis of these empirical findings, we have extended the model on human capital investment by assuming that an individual may be engaged in both religious and secular studies. Our model shows that as a result of the direct positive effect of religious studies on utility, the individual engaged in them is motivated to devote more time to religious as well as secular studies. This result is compatible with the empirical findings. The case of the effect of wage changes in the course of studying is used to highlight an interesting result of the extended model, whose conclusions differ from that of the traditional model. In the latter, a wage increase leads to an unambiguous decrease in the individual's study time, whereas in our model, a wage increase may increase time spent on religious studies, as a normal good, as well as on secular studies. We also discuss the positive externalities of religious studies and show how Jewish law and that of other denominations correct for this market failure.

Original languageEnglish
Pages (from-to)489-498
Number of pages10
JournalJournal of Socio-Economics
Issue number5
StatePublished - Nov 2003


  • Externalities
  • Religious studies
  • Secular human capital


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