Religion, social class, and entrepreneurial choice

Fascinating

While considerable concern has emerged about the links between religion and economic growth, little is actually known about how religion and social class impact the decision making of individuals. Using institutional theory and social dominance theory, this paper examines the influence of religion and social class on individuals' occupational choices. Based on a large-scale database from India, this paper finds that while some religions are relatively conducive to self-employment, some others have a negative impact on self-employment choices. Furthermore, individuals belonging to social classes that are lower in the social hierarchy are less likely to be self-employed. The role of both religion and social class in influencing the likelihood of choosing self-employment suggests an important link between religion, social class, and occupational decision-making.

Highlights

• We examine the role of religion and social class on occupational choice.

• We find that religions like Islam and Jainism are more favorable for self-employment.

• We find that Hindus are less likely to be self-employed compared to others.

• Individuals belonging to social classes lower in the social hierarchy are least likely to be self-employed.

The following regression models are estimated to link occupational choice with religion and social class:

equation(1)

Y=α+β₁*Religion+β₂*Education+β₃*Demographics+β₄*Wealth+β₅*Location+β₆*Industry+ε₁Y=α+β1*Religion+β2*Education+β3*Demographics+β4*Wealth+β5*Location+β6*Industry+ε1

equation(2)

Y=c+δ1*SocialClass+δ2*Education+δ3*Demographics+δ4*Wealth+δ5*Location+δ6*Industry+ε2

Let me quote the operative paragraph in here

While India is rich in diverse religions, some of them, such as Islam and Jainism, are more conducive to self-employment. The institutional profile associated with Islam strongly supports entrepreneurial activity. For example, Islamic banking models, based on the Koranic principles of risk sharing (Khan, 1996), may encourage even risk-averse Muslims to become self-employed. In Jainism, principles of self-reliance and benevolence to business (Caillat, 1987) give rise to an institutional profile that is conducive to self-employment. By contrast, Hinduism inhibits self-employment by shaping an institutional profile that is not conducive to self-employment choices. The normative pressures on Hindus to choose occupations based on the caste of their birth (Hutton, 1946), and the cognitive beliefs that do not support proactively changing thestatus quo ( Singer, 1966 and Tripathi, 1992) may discourage self-employment in Hinduism.

Although Christianity is associated with an institutional profile that is conducive to self-employment, it does not have a positive effect on self-employment in the Indian context. This result may be attributed to the large number of individuals from the Hindu backward classes converting to Christianity (Henderson, 2002). Thus, the estimated effect of the Christian religion in India shows the mixed effects of prior learning and new beliefs particularly with regard to the normative and cognitive dimensions of the two religions. The estimated effects of Buddhism and Sikhism show that the followers of these two religions are not different from Hindus when it comes to their self-employment choices. These results are attributable to the close relationship that Buddhism and Sikhism have with Hinduism. The founders of both the religions were Hindus and, Buddhism, in particular, shares many of the Hindu values and beliefs (

Maybe as public policy, the Indian government may want the Hindus to convert to Jainism. Or Islam. But as the example of Christianity shows, this will not work as despite conversions to another religion, they are still not being self employed.

Curious, eh?