Historical antisemitism, ethnic specialization, and financial development

Authors D'Acunto, Prokopczuk, Weber
Journal Review of Economic Studies
Year 2018
Type Published Paper
Abstract Historically, European Jews have specialized in financial services while being the victims of antisemitism. We find that the present-day demand for finance is lower in German counties where historical antisemitism was higher, compared to otherwise similar counties. Households in counties with high historical antisemitism have similar saving rates but invest less in stocks, hold lower saving deposits, and are less likely to get a mortgage to finance homeownership after controlling for wealth and a rich set of current and historical covariates. Present-day antisemitism and supply-side forces do not fully explain the results. Households in counties where historical antisemitism was higher distrust the financial sector more-a potential cultural externality of historical antisemitism that reduces wealth accumulation in the long run.
Keywords Cultural economics, cultural finance, intergenerational transmission of norms, stereotypes, household finance, history & finance.
URL https://doi.org/10.1093/restud/rdy021
Tags Archival Empirical  |   Evolutionary Finance  |   Financing- and Investment Decisions (Individual)