Wealth ownership is highly concentrated in the United States: the top 1 percent of households have consistently owned about 33 percent of net worth, and wealth inequality has gotten even worse since the recession. High levels of wealth provide great advantage, but even a small amount of savings can mitigate the effect of financial shock. It is relatively enduring within and across generations and can have significant educational, occupation, political and social advantages. Wealth provides a buffer against financial emergencies and can generate more wealth when it is reinvested.
Researchers are only beginning to understand the complex individual and family processes that affect saving and wealth ownership, but religion has emerged as an important part of the process. Religion embodies a great deal about a person's general approach to the world--their conception about how the world does and should work--and we are learning that it can shape financial outcomes in surprising ways.
There are two broad reasons that religion and wealth are related. First, religion affects wealth indirectly through its very strong effect on important processes such as educational attainment, marriage, decisions to have kids, how many kids people have and women's decisions to work or stay home with their kids. Religion affects these behaviors and processes, and they, in turn, affect household income, expenses and the amount of money left over to save. Understanding these processes alone accounts for a large portion of the religion-wealth association.
Second, religion can also affect wealth directly by influencing intergenerational processes, social relations and orientations toward work and money. Intergenerational processes (the transfer of both religious ideas and wealth from parents to children) and social relations (contacts made through religious group who can provide information, capital and other resources) are certainly important.
One of the most fascinating explanations is the direct effect religion can have on orientations toward work and money. Many of the important decisions about family, work and saving have roots in their religious beliefs. For example, in some conservative religious groups--including Conservative and Black Protestant denominations--becoming a minister, working for a social service agency or becoming a career missionary are considered good jobs. A calling into one of these careers can be important for religious reasons, but these jobs don't necessarily require high levels of education, don't typically pay well and won't make it easy to save and accumulate wealth.
Some examples can help illustrate these processes. Results from analyses of the National Longitudinal Survey, the Health and Retirement Study and the Economic Values Survey suggest that Conservative Protestant and Jewish families tend to be polar opposites on most measures of wealth. The results also show that behaviors regarding family, education, work and saving help explain why. Conservative Protestants often favor large families and a traditional gender division of labor in which women do not work out of the home. Conservative Protestants have also had, on average, lower levels of education than other groups. Having a large family, low education levels for parents and a single income-earner both make saving difficult and can lead to low wealth. Many Conservative Protestants also view money as belonging to God. People are considered managers of the money but should consult God or God's agents on earth regarding decisions to use their money. Tithing as a percent of income tends to be high in these faiths, and the desire to accumulate excess assets in person bank accounts can be seen as undesirable. As this suggests, Conservative Protestants have been at the low end of the wealth accumulation.
At the opposite end are Jewish families. Many Jewish mothers also stay home with their children for at least the first years of the child's life. But Jewish mothers are more likely to have high levels of education and a relatively small number of children. This makes it easier for the Jewish mother to devote time and other resources to early education. The Jewish mother is also more likely to return to work after her children enter school, adding to income and making saving and wealth accumulation more possible. Jewish families are also more likely to take a pragmatic approach to money--that is, money is more likely to be seen as a tool or a vehicle for taking care of family needs and other practical concerns--and tend to accumulate relatively high amounts of wealth.
White Catholics are an important example because their position in the wealth distribution has changed considerably in recent years. Less than a generation ago, white Catholics were relatively disadvantaged: they had low educations, low income, low wealth. Important shifts in orientations toward family and women's roles in the family were important contributors. White Catholics now have much smaller families than in prior generations and Catholic women are as likely as Mainline (or Liberal) Protestants to work out of the home. Combined with a pragmatic, pro-saving orientation toward work, this has propelled white Catholics up in the wealth distribution in recent years.
Mormons (LDS) are also interesting because they combine elements of groups that are otherwise distinct. Mormons tend to be religiously conservative, favoring large families and traditional gender roles. However, Mormons typically have high educations and report more pragmatic orientations toward money and accumulation. The result appears to be that Mormons have higher wealth than other conservative Protestant groups, although these findings are a bit more speculative than for other groups because Mormons make up a relatively small proportion of the U.S. population.
Naturally, these relationships and processes are much more nuanced than simple examples suggest; there are very important differences within each of the groups I mention and a large number of other factors affect wealth accumulation as well These examples also leave open questions about happiness: wealth does not necessarily lead to greater satisfaction, and some argue that investing in religion can have both intangible and tangible benefits. However, it has become clear that the relationship between religion and wealth is very strong. The recent recession underscored the need for savings at all levels of wealth, and the importance of religion in American culture suggests that this may be an important part of the explanation for growing inequality.