The causal effect of income on religious participation

Abstract

Religion is an important factor influencing outcomes at both the individual and societal level. Participation in religious activities involves both time and money. As such, individuals who make decisions about whether to be religious and the intensity of participation are making decisions concerning these scarce resources. This paper examines how income changes for low-income individuals affect religious giving and attendance decisions. Change in the Earned Income Tax Credit across states, over time, and by number of children is used as an exogenous source of variation in income. Using an instrumental variables strategy, I find evidence that positive changes in income reduce religious participation for low-income individuals and households. To the extent that religious behaviors and institutions constitute net benefits to society, policymakers should be careful to include reduction in religious behaviors as a possible cost to public cash transfer programs.