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Applied Microeconomics Group Seminar Losing My Religion

Speaker: Dr Shqiponja Telhaj, University of Sussex

Abstract: This paper studies the relationship between economic prosperity and religion through the lens of social norms. Through employing a social equilibrium framework, where a society is one realization of many possible social equilibria, we model how the Albanian government attempted to increase female participation in education and employment by changing the social-equilibrium through credibly committing to communist ideals. This signal was accomplished through declaring Albania as the First Atheist country in the world in 1967 and the de-sanctification of its religious buildings, excluding those deemed national cultural monuments 20 years prior. We use this variation in spared buildings to measure the credibility of the government's commitment to female emancipation in each municipality. We find that, in the forty years following the reform, municipalities in which all religious buildings were de-sanctified experienced higher growth in female schooling, labor market participation, and production. We argue that changing social norms, through religion, is an additional policy lever for governments to achieve their policy goals.

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