It’s a foregone conclusion that Christianity is declining in America. Could that impact the nation’s economy? In short, some economists believe that the answer is yes.
Most people think of economics in terms of money, but it’s much more than that. In this column, we’ve learned that economics is the study of how humans allocate scarce resources. Time is a scarce resource, as are humans, in terms of general population or labor force. Demographic changes, therefore, are an important component of economics, too. Consider religious belief as another scarce resource, “allocated” among many groups of people. The state of the economy impacts people and their beliefs, the way they see the world. In turn, these beliefs impact the economy and vice versa.
Earlier this month, Pew Research Center released a report, “Modeling the Future of Religion in America,” about the changing demographics among Christians in the United States. By analyzing current trends and projecting hypothetical scenarios 50 years out, the Pew team modeled what will happen to the presence of the Christian population in America. The results? “In all four main scenarios [illustrated below], religiously unaffiliated Americans are projected to approach or exceed Christians in number by 2070,” the report states. In the most likely scenario, Christianity is expected to no longer be embraced by the majority of Americans by the year 2050.
Pew illustrated the future of Christianity in America with four possible scenarios for the year 2070:
As things now stand, according to Pew’s data:
Christians made up 64% of the U.S. population (including children) while ‘nones’ accounted for 30% and other religious groups 6%. Based on observed data, the baseline scenario assumes that 34% of people who grew up Christian will discard their religion by the time they turn 30.
What, then, will the future look like?
Pew suggests scenario two is most likely — Christianity in America will experience rising disaffiliation with limits. This scenario, Pew says, reflects recent trends: Americans switching from Christianity to something else, mostly into being religiously “unaffiliated,” a group often called “nones.” This research estimates that disaffiliation will continue accelerating in America, as it has in many Western European countries (but with certain limits that reflect global trends in religious retention rates).
So, who is disaffiliating, and what does that tell us about the future of our economy?
Demographics and the economy
In the report’s first chapter, Pew describes the survey results in terms of age, gender, education, politics, and geography. Most of those people switching from Christianity are under age 30, male, college-educated, politically left leaning, and living on the U.S. coasts. If you’ve been following the conversation around the “rise of the ‘nones’” in recent years, none of this will come as a surprise.
A few factors affect the landscape of religious beliefs in the U.S. Take immigration as one example. The Pew report notes that about “a million immigrants come to the U.S. each year, and one-in-seven people in the U.S. were born elsewhere.” Decades ago, those immigrants mostly came “from Mexico and other Christian-majority countries in Central and South America.” Now, however, “new arrivals are more likely to come from Asia,” especially China and India. The prevalent religious beliefs of these countries are commonly “unaffiliated” with Christianity, often Hindu or Buddhist.
Immigration is the leading cause of growth in the share of “other” religions according to Pew’s findings, and the “other” share is expected to double over the next several decades. This is notable because the number of people immigrating to the U.S. has sharply increased since 1970, according to data from the Migration Policy Institute. The increase may be due to free-trade agreements and globalization, factors greatly affecting the economy in many ways.
Immigrants represent a growing share of American labor and productivity. For instance, Axios reported last week that the economic output of U.S. Latinos alone in 2020 reached $2.7 trillion, “surpassing the GDPs of the U.K. and India.” Real GDP growth for Latinos in the U.S. in 2020 was almost double that of the U.S. as a whole from 2010 to 2020, and Latino consumption was larger than the entirety of both Canada and South Korea in the same year.
Similarly, according to estimates from Goldman Sachs, “Asian Americans drove 23% of U.S. private sector output growth over 2003–2019,” which represents about $1.5 trillion, about as much as the total GDP of Australia or Spain.
For the U.S. economy as a whole, this is a wonderful thing. Immigrants gain new opportunities and incomes, building better lives for themselves and their children. They also support the receiving nation through innovation and labor, making everyone — native-born and otherwise — better off.
Religion and the economy
Here’s an overly simplistic way to think about how this relationship can work: The American economy is the largest in the world, the current GDP sitting around $23 trillion. If 64 percent of Americans identify as Christians, then (other factors aside) let’s say 64 percent of the U.S. GDP, or nearly $15 trillion, is powered by individuals identifying as Christians. That’s more than all the European economies combined. As Christians make up a smaller share of the American population, and increasingly so, their impact on the economy will grow smaller as well. What will this mean for the economy as those numbers change over time?
Christianity encompasses varied beliefs among Catholics, Protestants, “cultural Christians,” and other denominations. Regardless of the differences, though, research has long held that certain beliefs affect economic productivity more than others.
In the first major argument for the connection between religion and the economy, The Protestant Ethic and the “Spirit” of Capitalism, published in 1905, social scientist Max Weber wrote:
Business leaders and owners of capital, as well as the skilled higher strata of the labor force, and especially the higher technical or commercial trained staff of modern enterprises tend to be predominantly Protestant.
Weber traced this connection to Luther’s and Calvin’s emphasis on “calling” or “vocation,” an argument that said that God was pleased not just with pious, religious work but also with daily work.
Weber’s further conclusions are more arguable, as he suggested that Protestants, especially Calvinists, needed to prove their salvation by working harder, since, unlike Catholics, there were no works to denote an outward assurance of salvation. Nevertheless, his hypothesis was a major starting point for modern analysis of the relationship between religion and economics.
Religion and human capital
Human capital is the ideas, skills, and knowledge that humans bring to the proverbial table. And it’s one of the biggest contributors to economic growth. Human capital transforms economic growth through technological inventions and hard work. And religious belief — Christian or otherwise — has been shown to impact human capital in many ways.
Harvard economists Rachel McCleary and Robert Barro partly argued as much in their 2019 book, The Wealth of Religions. Citing several studies covering modern times and the post-Reformation era, they noted that variations of Protestantism “explain substantially higher levels of human capital” in literacy and per capita income. In one particular study, “shifting from an all-Catholic to an all-Protestant population was found to raise the share of high performers on the reading exam by 19 percentage points and that on the math exam by 19 percentage points.” Another study showed that “an increase in belief in hell leads to an increase in economic growth.”
However, McCleary and Barro do note that, according to at least one theory, “there is a clear trade-off between the benefits from religiousness and the time and other costs of greater religious participation.” That’s because praying and attending religious services is a time-sensitive activity. The more time spent there, the less time spent working. For a society that highly values its time, like high-income workers in a high-income country, that participation decreases, while retired people and women not in the labor force will spend more time in religious activities.
Interestingly, though, McCleary and Barro disagreed with the view that higher educational attainment reduces religious participation. Since a better education gives one the ability to better understand abstract concepts, there’s no reason why education and religion should be incompatible. Additionally, they wrote that, other factors held constant, “there is no evidence in the cross-country data that more years of education reduce religiosity.”
The future of the American church and the American economy
As the share of Christians in America falls, the downward trend will undoubtedly make an impact on church participation, social mores, and economic output for decades to come. The Pew study leaves us little hope that this trend will change.
In a final note that should encourage missionaries and evangelists everywhere, however, Pew writes that “there is no data on which to model a sudden or gradual revival of Christianity (or of religion in general) in the U.S. That does not mean a religious revival is impossible. It means there is no demographic basis on which to project one.”
Finally, remember to take all “data-driven” research with a grain of salt: Whenever you see a chart, ask questions. How was this data collected? What else is going on for this to be true? What is the chart not saying?
Data like this, whether economic, demographic, climate-related, or something else, requires many assumptions in order to project the future, assumptions the Pew team states plainly. Those assumptions can often very inaccurately reflect reality. Consider that just a few months ago, expert economists at the Federal Reserve argued that inflation was essentially a non-issue.
Regardless, sow those seeds, my friends, praying that Christianity will continue to transform our communities — and our economies.