Is the Protestant Ethic Alive in Latin America? an Empirical Assessment of the Economic Impacts of Religion and Missionaries in Guatemala

Abstract

This paper assesses the theory that Protestantism has caused income growth during recent decades in Latin America. Focusing on Guatemala and using individual-level data from Demographic and Health Surveys, I find, contrary to this theory, that Protestants and non-Protestants are no different along a variety of economic outcomes. Furthermore, using growth in the density of lights at night to proxy for income growth at the municipality level, I find that municipalities with a higher share of Protestants have similar income growth to other municipalities. Finally, I find that proximity to Catholic parishes in 1925 has a negative impact on the probability an individual is a Protestant today. Thus, I use Catholic parish proximity to instrument for Protestantism today and provide IV estimates that cannot confirm effects of Protestantism on income. However, I do find one link between Protestantism and income: persistent positive effects of Evangelical and Presbyterian missionaries on education and income. This paper contributes to the literature on the effects of religion on economic development while focusing on a specific context and question that have not yet been studied.