Felix Schaff

Felix Schaff, PhD Candidate from the London School of Economics will present his paper The Unequal Spirit of the Protestant Reformation: Religious Confession and Wealth Distribution in Early Modern Germany.

ABSTRACT:
This paper studies the impact of the Protestant Reformation on wealth inequality in confessionally divided Germany, between 1400 and 1800. The Reformation exacerbated inequality. Yet I do not find evidence of higher top wealth shares in Protestant communities, contrary to the argument of Max Weber about Protestant capital accumulation. Instead, using Difference-in-Differences and an Instrumental Variable strategy, I find a negative effect of the Reformation on the wealth shares of lower classes: poor people became comparatively poorer. The result is driven by the confiscation and reallocation of economic resources away from poor relief, and the introduction of novel, secular but exclusionary and ungenerous poor relief institutions in Protestant communities. These brought about a new low-redistribution equilibrium. The inegalitarian character of Protestantism, typically found in contemporary societies, can be traced back to the beginning of the Reformation in the sixteenth century.