Bwick Columnist examines religious belief and participation roles in economic growth
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How declining religiosity is reshaping the U.S. economy
Last week, my colleague Dr. Roscoe Scarborough presented data on trends in religiosity in the United States. Dr. Scarborough stated that the proportion of Americans identifying as Christian has declined from 90% in 1990 to less than two-thirds today, and the number claiming no religious affiliation has risen from 5% to over 25%.
Even before national surveys started to show shifts in religious affiliation, churches were seeing declines in attendance. An article published in the early 2000s by Christianity Today references concerns about falling church attendance beginning as far back as the 1960s.
The trend matters not only to struggling churches but to society as a whole. There is little doubt religious participation has an impact on GDP. The size and direction of that impact, however, is not a matter of consensus among scholars.
An oft-cited 2016 article by sociologist and attorney Brian J. Grim and Melissa E. Grim finds that the impact of religion on the U.S. economy at the time was at least $378 billion per year, the combined revenue of faith-based organizations. The authors argue this is a gross understatement, and when they add in their estimates of the value of goods and services provided by religious organizations and faith-based businesses, they calculate an economic impact of $1.2 trillion per year.
These numbers should cause us to pause and consider how declining religiosity is impacting our country. For example, if one religious household left the faith, would that household then contribute more or less to the economy? It is hard to tell from the Grim and Grim article alone.
I dug into this question and have been fascinated by the findings of economists who have studied the relationship between religion and economic growth using statistical techniques that do allow comparison to a counterfactual.
Rachel McCleary, an associate with the Hoover Institution at Stanford, describes a two-way street between religiosity and economics. Comparing outcomes across countries with varying levels of economic development and religiosity, she finds that increasing economic development reduces religiosity, as the opportunity cost of religious participation rises. Studying the reverse causality, she finds that religion has a mixed effect on economic development. Religious beliefs (e.g. in hell, heaven and the afterlife), which tend to be associated with positive ethics, also tend to increase productivity and growth in a society. But, religious participation (i.e. church attendance) has a negative effect on economic growth, perhaps by diverting time and resources away from market activity. As McCleary describes it, “the main growth effect that we find is a positive response to an increase in believing relative to belonging (attending).”
McCleary remarks that the U.S. is an outlier in her study. For a country with such a high GDP per capita, we also have very high rates of both religious belief and formal religious participation.
Even so, within our country, at least one of the trends McCleary describes seems to hold up — religious participation negatively affects local economies. A 2023 study by economists Petach and Powell looks at trends in county-level religious participation between 2000 and 2020 compared with county GDP growth over the same time period. They find that a 10% increase in religious participation in a county reduces that county’s per capita GDP growth rate by 19% relative to the average county’s growth rate.
A key mechanism through which Petach and Powell find religious participation negatively affects GDP is actually a very bright silver lining for religion. They find that the strength of religious social networks prevents the demise of unproductive firms, stunting economic growth in more religious counties. Dr. Scarborough wrote last week, “Americans are starved for connection and community.” I agree, and I’d argue more religious participation might be what we need, even if it comes at a cost to GDP.
Dr. Melissa Trussell is a professor in the School of Business and Public Management at College of Coastal Georgia who works with the college’s Reg Murphy Center for Economic and Policy Studies. Contact her at mtru...@ccga.edu. The views expressed in this article are those of the author and do not necessarily represent those of the College of Coastal Georgia.