Annual Income and Religious Affiliation

Academic study on the relationship between religious affiliation and yearly income is still very important. Economists claim that religiosity has a direct impact on comparative advantage-based economic metrics like the nation's GDP and people's per capita income, even if the majority of scholars share the belief that there is an indirect association between religion and family income. Furthermore, more globally structured social groupings with greater ability to influence the creation and implementation of economic policies have contributed to the seeming gap between income and potential religious welfare improvements. Other social indices like as education, gender balance in office, income distribution, and people's attitudes toward formal employment are all known to be impacted by religious commitment. Undoubtedly, we have come across instances where religious denominations incorporate certain standards and values in most of their social teachings so as to empower their members and ensure that believers have the capacity to improve their incomes. Therefore, it is not strange that denominations have varying approaches to issues of wealth, meaning that individuals’ preferences to income depend on unique religious affiliations. Despite the varying opinions of researchers, economists, and theorists, which seem to revolve around the limited data set, this paper ascertains whether there is a correlation between religious affiliation and annual income.

Literature Review

Existing empirical studies reveal a close link between religious affiliation and annual income. For example, a study conducted by the “Good Magazine” and Column Five (2010) identified significant variations in annual income among prominent religious groups in the United States. The report ranked believers of Hindu religion among the affluent Americans. While close to 80% of Hindus earn at least 50,000 dollars each year as part of their income, only 75% of Jewish believers, who rank second highest earn at least 50,000 dollars per year. The figures, however, put Catholics and Protestants in the 3rd and 4th positions respectively with about 49% of Catholics and 43% of Protestants receiving an annual income above 50,000 dollars. Although Catholics and Protestants are the most popular spiritual groups, they seem to suffer high unemployment rate, thus, the reason behind the low annual income level.

Contrary to the argument about the high unemployment rate, other studies reveal some of the potential factors that make individuals from specific religions to have more positive wage enhancing characteristics than their counterparts. Lehrer (1999) determined that Jewish value education and always work harder to acquire the necessary knowledge and skills required for different job positions than believers of other affiliations. Correspondingly, Lehrer (1999) argues that educational achievement among Protestants appears to be lowest, meaning that members of this religious group may not have the opportunity to enjoy some of the rewards that come with education.

Moreover, Lowry (1998) argues that religiosity is characteristically a reflection of people’s belief about “the good life and wealthy society” (p.226). This according to Lowry (1998, p. 230) means that the strength of a religion might, in one way, influence the extent to which people believe in both economic and income policies. In his study of Judeo-Christian believers, he (1998) found out that Protestants hold a positive, yet a significant effect on economic policies that seem to have direct impacts on household income. In another similar study, Glaeser and Glendon (1998) set forth to test Max Weber’s opinion that the level of GDP of Protestant nations is smaller than the income level registered by Catholic nations. Similarly to Max Weber, Glaeser and Glendon (1998) stated that the difference in GDP between Protestants and Catholics revolves around the divergent views of Calvinism and Catholicism. While Calvinists believe on the “dogma of predestination,” Catholics support the view of “free will” as the only secret towards economic progress. Every believer according to Judeo-Christians should engage in more socially efficient beliefs (Glaeser & Glendon, 1998). The provision of incentives should, therefore, not only target those people who consider an “afterlife” to be the foundation of faith but should transcend in a way that convinces each member of the society that their religion is in a better position to solve emerging social issues including poverty.

There are, however, those researchers who believe that the association between religious affiliation and income is triggered by other factors including attitudes. For example, Guiso, Sapienza, and Zingales (2003) in their study of the “the impact of religion on attitudes towards market economy” indicated that religiosity is a key determinant of people’s per capita income and social progress. Guiso, Sapienza, and Zingales (2003) explained that religious belief is a controlling factor, and on average, influences individual’s attitudes towards social indicators including health status, age, gender, and income. In other words, a country that perceives a common social belief is expected to establish fixed principles and policies that affect people’s contributions to economic development. Mehanna (2003) argues that nations that are open to issues of trade such as Protestants are more likely to expand their annual incomes than conformistsincluding Catholic and Muslim countries.

Apart from spiritual attachment, researchers argue that the strength of religious connection (or religiosity) affect members’ preferences in different ways. Theologists observe that devout members of religious groups do not ascribe to greater economic and social progress than those individuals who are religiously less active. Dahl and Ransom (1999) in a survey of followers from the “Church of Jesus Christ – Latter Day Saints” on issues of tithing obtained contrary views regarding the link between religious affiliation and wages for tithing reasons. In their study, Dahl and Ransom (1999) revealed that the definition of income from the perspective of fervent members of the church was less likely to be affected by financial self-interest. However, the less active members of the church treated gifts, financial market gains, and self-employment earnings with high significance because some of these factors affect their contribution to the church. Another important reason for the variation in income levels among the religious groups revolves around the relative significance of utility functions (Pitts, Mia, & Henry, 2011). The functions of the individuals’ utilities affect their response to maximize earnings. The members of a religious group may consider the desire to improve income level as more materialistic and lacking moral support to social life.

Theories

Until now, no one has examined how major evangelical donors talk about their philanthropy or initiative they support. The subject of religious philanthropy has been explored, and the places of religious sentiment in studies of elite philanthropy have also been touched upon. However, none of these relied upon primary data from devout donors themselves. For more on evangelical rising fortunes and business activity, for instance, more than one leader expressed disbelief that, in the end, they disclosed this information. The supplemental research was conducted on the different foundations and trusts through which nearly 49 percent of the study revealed their actions which correlate between their support and the income.

Currently, the churches have been converted into the area of business. There are several incidences that we have seen false pastors and prophets who have hidden with the word of God. These pastors and prophets often capitalize on the belief of their followers. Thus they cannot question their role in churches. The Bible doctrines cannot be judged either, thus, giving a greater opportunity for the entrepreneurs, especially in the Protestant churches. A lot of funds are always channeled to the charity organizations which the donors believe that this money helps the needy, but it all remains in the church leaders hands while a quarter of the funds reaches beneficiary groups in these churches, for instance, orphans, widows among others. Therefore, there is a correlation between religiosity and the income.

Additionally, several theories try to explain the relationship that exists between the religion and income (Lewis, 2013). Apparently, if one asks someone why he/she is a church leader, the possible answers should be a narrative then at the end they will tell that it is a calling. Significantly, it is quite difficult to investigate or rather question the work of God. Moreover, there are other several studies which reveal that there exists another variable that affects income in the church. However, income influences religion. The churches will at times do whatever it takes to see that they have a large turnout of church members. It is argued that the more the church members are in the church, the bigger the income.

Ekelund and Hébert (2013) observed that the Protestant are the major group that is affiliated with rational capitalism, especially the Calvinistic. The Protestant churches attracted attract the highest level of annual income as compared with another church group, for instance, the Roman Catholic and the Jews. The Protestant believes in the rationale that working for God is a “calling”. This kind of the belief theory often capitalizes on the church offerings which is income that is always offered by the followers on every Sundays. Higher church attendance often translates to a high income, thus, building in the social capital. Churches also play a vital role as a civil organization, hence, gaining a lot of opportunities which attracts a lot of income. Belief correlates with the income. Churches focus on strengthening belief in their followers to increase attendances hence translating to income.

Moreover, if the religion is based on the good work, this influences church income negatively. The Roman Catholic Church concentrates on the good work which has translated to lower income, unlike the Protestants who believe the word of God is a calling, thus, reaping from their followers maximally. This literature finds that there is a bi-causal correlation relationship between religion and the income (Ekelund & Hébert, 2013). However, it also focuses on the endogeneity variables within the church which affect income, for instance, church attendance, beliefs, membership among other variables. Endogenous factors such as forgiveness of sin or salvation, resurrection, heaven, and hell reduce income. Several studies tend to ignore these factors when analyzing the correlation between religion and income.

Fundamentally, the relationship between religion and the income is rooted deeply in the race factors. A large number of the African-Americans population is Protestant. The African Americans represent a high percentage of poor people in America. Therefore, they find their consolation through churches. Karl Marx defined religion as the opium of the poor.

Social capital refers to a variety of entities as opposed to a single entity (Tzanakis, 2013). It is composed of social structures which other certain functions. Social capital is perceived to be more productive. The social capital is based in micro-level which tend to foster development among individuals in the community. The concept of social capital is also rooted in the trust which is built on the religious beliefs. On the religious grounds, social capital is based on voluntary membership. The followers often give out their offering to churches without questioning. It is evident that those churchgoers are likely to contribute more income to the church than those who attend religious functions under different occasions. The religious and social capital is also conceptualized with the civil engagement which is bound to attract a lot of income for the church.

Faith is also perceived to a major contributing factor to social capital. Faith is perceived as a fundamental doctrine that Christians have to embrace. Christians believe that having faith is a way of salvation. Faith communities contribute positively on bridging and linking social capital even though it faces both internal and external obstacles that hinder development. Today living with different people with common or with different faith has become a common phenomenon. Faith communities develop a local, regional, national, and international framework which networks with other communities. However, as the faith-based organization develops every day, they are also influenced by the income. Despite faith fostering the development of social capital, it can also create conflict among groups. Faith without action is dead is what most our religious leaders use to get more income from the church members. Henceforth, for those who contribute much to the church are perceived to have faith and are respected in the church or by any religious group. The true holy doctrine of an individual giving out the smaller wealth he or she possesses has been bypassed by the religious interest of getting more income. Even the preaching has also been diversified and concentrated more on the income.

Hypothesis

Even though the pieces of evidence drawn from the literature review and theories provide sufficient information about the relationship between household income and religious affiliation, it is important to use subjective data to determine whether these claims hold ground. The researcher will only be able to determine the strength and direction of the relationship between the two variables through appropriate data analysis techniques. Tentatively, the research hypothesizes no correlation between religious affiliation and annual income.



Operationalization

The researcher used data from the 2006 report about the 1979 National Longitudinal Survey of Youth (NLSY79) to test the hypothesis. Data from 2538 participants that had been randomly sampled were collected and analyzed for the purposes of testing the hypothesis. The specific variables of interest included the respondents’ religious affiliations, family income level, and total income for each of the affiliates. Religious affiliation was further subdivided into two categories representing those devoted to religious beliefs and non-believers (Affiliated and No Affiliation). Although 18 individuals did not participate in the study, 2520 respondents had the opportunity to contribute to the research by either filling in the survey questions or responding directly to field interviews. This gave the investigator a response rate of 99.3%. The respondents were asked questions regarding their religious affiliations as well as income level.

Before engaging in data analysis, it was necessary to determine the validity and reliability of the data provided. The researcher noticed some level of consistency in the responses, indicating that the information that was provided by the participants were truthful. The raw data from the field were used to perform regression analysis while income in thirds was used to perform the Chi-square test, and the results recorded in distinct tables as shown under the section of results.

Results

Frequencies

Table 1: Response Rate

Statistics



Does R identify a religious affiliation?


Total Family Income

Income in Thirds

N

Valid

2520

2314

2314

Missing

18

224

224

Mean

.7929

17.12

2.0830

Median

1.0000

18.00

2.0000

Mode

1.00

20

3.00

Std. Deviation

.40534

5.810

.85024

Out of the 2538 people sampled, 2520 gave information regarding their religion. Additionally, 2314 individuals became free to share information regarding their total family income, meaning that 224 respondents decided to ignore this part of the survey. The first task was to use R as a subjective measure to determine whether an individual belonged to any religious affiliation. The second and third tasks involved using the data to determine the total family income and incomes in thirds. According to the results, a mean of 0.7929 indicates that on average, the majority of the respondents identified themselves with specific religious groups while a mean of 17.12 reveals that a larger part of the population was employed and receiving regular income. The mode, 1, under religious affiliation shows only one instance where the respondents gave the same answer regarding their religion. However, the mode, 20, shows that a greater proportion of the respondents gave similar values regarding total family income. With a standard deviation of 0.405 from the mean, the researcher found it easy to classify the majority of the respondents as either religiously affiliated or not religiously affiliated.

Table 2: Does R identify a religious affiliation?



Frequency

Percent

Valid Percent

Cumulative Percent

Valid

No Affiliation

522

20.6

20.7

20.7

Affiliated

1998

78.7

79.3

100.0

Total

2520

99.3

100.0



Missing

System

18

.7





Total

2538

100.0





When the 2520 valid respondents were asked to indicate whether they belonged to religious affiliations, 20.6% indicated that they were not affiliated while 78.7% revealed that they were affiliated. The change in percentage between non-affiliates and affiliates is also shown in figure 1 of the appendix.

Table 3: Total Family Income



Frequency

Percent

Valid Percent

Cumulative Percent

Valid

UNDER $1 000

38

1.5

1.6

1.6

$1 000 TO 2 999

29

1.1

1.3

2.9

$3 000 TO 3 999

20

.8

.9

3.8

$4 000 TO 4 999

12

.5

.5

4.3

$5 000 TO 5 999

22

.9

1.0

5.2

$6 000 TO 6 999

18

.7

.8

6.0

$7 000 TO 7 999

16

.6

.7

6.7

$8 000 TO 9 999

51

2.0

2.2

8.9

$10000 TO 12499

84

3.3

3.6

12.5

$12500 TO 14999

64

2.5

2.8

15.3

$15000 TO 17499

66

2.6

2.9

18.2

$17500 TO 19999

50

2.0

2.2

20.3

$20000 TO 22499

69

2.7

3.0

23.3

$22500 TO 24999

86

3.4

3.7

27.0

$25000 TO 29999

123

4.8

5.3

32.3

$30000 TO 34999

141

5.6

6.1

38.4

$35000 TO 39999

104

4.1

4.5

42.9

$40000 TO 49999

173

6.8

7.5

50.4

$50000 TO 59999

208

8.2

9.0

59.4

$60000 TO 74999

227

8.9

9.8

69.2

$75000 TO $89999

172

6.8

7.4

76.6

$90000 TO $109999

167

6.6

7.2

83.8

$110000 TO $129999

94

3.7

4.1

87.9

$130000 TO $149999

73

2.9

3.2

91.1

$150000 OR OVER

207

8.2

8.9

100.0

Total

2314

91.2

100.0



Missing

REFUSED

126

5.0





DK

98

3.9





Total

224

8.8





Total

2538

100.0





Regarding the family total income, the majority of the population (8.9%) earned between 60,000 dollars and 74,000 dollars. 8.2% of the respondents were the highest paid individuals with their annual incomes falling above 149,999 dollars. However, 1.5% of the population obtained annual incomes below 100 dollars. Perhaps, these were the least paid affiliate groups according to the statistics.

Table 4: Income in Thirds



Frequency

Percent

Valid Percent

Cumulative Percent

Valid

Up to $29,999

748

29.5

32.3

32.3

$30,000 to $59,999

626

24.7

27.1

59.4

$60,000 and above

940

37.0

40.6

100.0

Total

2314

91.2

100.0



Missing

System

224

8.8





Total

2538

100.0





For easy synthesis, it was necessary to divide the family incomes into three categories including those earning below 29,999 dollars, those making between 30,000 dollars and 59,999 dollars, and finally individuals whose salaries go beyond 60,000 dollars. From Table 4, it is evident that the annual income of the majority of the population (37.0%), falls above 60,000 dollars, 24.7% between 30,000 dollars and 59,999 dollars, and 29.5% earning a maximum of 29,999 dollars.

Another part of analysis involved performing cross tabulation operations to determine income variation (income in thirds) between the two groups. According to the information in Table 5, 32.1% of the non-affiliated individuals earned an annual income of up to 29,999 dollars, 29.6% received between 30,000 dollars and 59,999 dollars while 38.3% received incomes above 60,000 dollars. On the contrary, 32.3% of the affiliate members received up to 29,999 dollars, 26.4% acknowledged between 30,000 dollars and 59,999 dollars while 41.2 recorded income levels above 60,000 dollars.


Table 5: Does R identify a religious affiliation? *Income in Thirds Cross-tabulation



Income in Thirds

Total

Up to $29,999

$30,000 to $59,999

$60,000 and above

Does R identify a religious affiliation?

No Affiliation

Count

155

143

185

483

% within Does R identify a religious affiliation?

32.1%

29.6%

38.3%

100.0%

Affiliated

Count

589

481

751

1821

% within Does R identify a religious affiliation?

32.3%

26.4%

41.2%

100.0%

Total

Count

744

624

936

2304

% within Does R identify a religious affiliation?

32.3%

27.1%

40.6%

100.0%

The Chi-square test allowed the researcher to determine whether there is a significant relationship between the two sets of data (the % count for income thirds and religious affiliation for the two categories). Using the “simple random sampling technique,” the researcher wanted to prove that:

H0: There is no association between religious affiliation and annual income (the variables are independent)


Ha: There is an association between religious affiliation and annual income (the variables are not independent).


Table 6: Chi-Square Tests



Value

df

Asymp. Sig. (2-sided)

Pearson Chi-Square

2.256a

2

.324

Likelihood Ratio

2.236

2

.327

Linear-by-Linear Association

.381

1

.537

N of Valid Cases

2304





a. 0 cells (0.0%) have expected count less than 5. The minimum expected count is 130.81.

From table 6, the P-value for the Pearson Chi-square was 0.324 against the 2 degrees of freedom at 90% level of significance. Since the P-value is smaller than the degrees of freedom, we do not reject the null hypothesis and conclude that there is no association between religious affiliation and annual income.

It was also important to identify the magnitude and direction of the relationship through regression analysis. The results from table 7 show that the regression coefficient, r, for the dependent variable (total family income) and predictors (Does R identify a religious affiliation?) is 0.000 at 90% significant level.

Table 7: Regression Results

Model Summary

Model

R

R Square

Adjusted R Square

Std. Error of the Estimate

1

.000a

.000

.000

5.807

a. Predictors: (Constant), Does R identify a religious affiliation?

ANOVA


Model

Sum of Squares

df

Mean Square

F

Sig.

1

Regression

.016

1

.016

.000

.983b

Residual

77632.977

2302

33.724





Total

77632.993

2303







a. Dependent Variable: TOTAL FAMILY INCOME

b. Predictors: (Constant), Does R identify a religious affiliation?

Coefficientsa

Model

Unstandardized Coefficients

Standardized Coefficients

t

Sig.

B

Std. Error

Beta

1

(Constant)

17.128

.264



64.821

.000

Does R identify a religious affiliation?

-.006

.297

.000

-.022

.983

a. Dependent Variable: TOTAL FAMILY INCOME

Discussion

The research initial hypothesis was that there is no correlation between religious affiliation and annual income, which appears to contradict the economists' views of a direct relationship between religiosity and yearly earnings. From the analysis, we can extract a mode given by the equation, Religious Affiliation = 17.128 + (-0.006)*Annual Income, where "A" is constant at 17.128 and "b" – the intercept of annual income is -0.006. With the values for A and b, the study demonstrates that the model is significant at 0.000 level and that it can be used for predictions. However, the regression coefficient of .000 indicates that there is no relationship between the two variables. This means that even though people might decide to become religiously affiliated, we do not expect to see a change in their income levels. In other words, religion alone is not a factor to be used to determine changes in individual's annual earnings. Furthermore, the .000 r2 supports the view that no percentage change in household income can be explained by religious groupings.

My outcomes support the initial view of zero correlation between religious affiliation and annual income. Precisely, the findings seem to support the argument of an indirect relationship between spiritual grouping and yearly wages. The results, however, contradict the opinions of many researchers who believe that religion can be a good predictor of wealth, and assumes other factors related to religious affiliation such as education, age, gender perception, and attitude to play a major role in determining people’s financial or economic progress.

One fundamental explanation for the inconsistency revolves around the differences in variables used by past researchers and those used in this study. While my research focuses on religion as a single factor, most investigators disintegrate religion into several attributes, thus, giving a false impression of the supposed relationship. Even though data limitation could be an issue to investigate further, it may not bring much difference because the information from the respondents gives a true reflection of their opinions on matters of religion and income.

Conclusion

The view of a strong positive correlation between the religious association and annual income is flawed. In other words, religion or social grouping as a single factor does not predict individuals’ annual income. Religious conviction only affects people's perceptions and response to other economic indicators as signaled by the attainment of high education, gender equality in workplaces, and people's attitudes towards economic policies. Wealth is earned through hard work, not religious persuasion.

With the current economic changes as characterized by recession and depression, it will be unfair for researchers and renowned philosophers to advise members of religious groups to sit back and wait for manna from heaven. Perhaps, my research has been misinformed by what makes a religion. However, I find it strange believing that Hindus are wealthier than Protestants or any other religious group because of their faith.



References

Ekelund, R.B., & Hébert, R.F. (2013). A history of economic theory and method. Long Grove, IL: Waveland Press.

Glaeser, L., & Glendon, S. (1998). Incentives, predestination and free will. Economic Inquiry, 36(3), 429-443.

Good Magazine, & Column Five. (2010). The almighty dollar: Mapping distribution of income by religious belief. Retrieved from https://www.columnfivemedia.com/work-items/infographic-the-almighty-dollar

Guiso, L., Sapienza, P., & Zingales, L. (2003). People's opium? Religion and economic attitudes. Journal of Monetary Economics, 50(1), 225-282.

Lehrer, E.L. (1999). Religion as a determinant of educational attainment: An economic perspective. Social Science Research, 28(4), 358-379.

Lewis, W.A. (2013). Theory of economic growth (Vol. 7). London: Routledge.

Lowry, R.C. (1998). Religion and the demand for membership in environmental citizen groups. Public Choice, 94(3), 223-240.

Mehanna, R.A. (2003). International trade, religion, and political freedom: An empirical investigation. Global Business and Economics Review, 5(2), 284-296.

Pitts, J.D., Mia, K., & Henry, T. (2011). The wages of religion. International Journal of Business and Social Science, 2(14).

Tzanakis, M. (2013). Social capital in Bourdieu’s, Coleman’s and Putnam’s theory: Empirical evidence and emergent measurement issues. Educate~, 13(2), 2-23.



Appendix

Bar Charts

Figure 1: Percentage Affiliates and Non-Affiliates



Figure 2: Percentage Change in Family Income



Figure 3: Percentage Income in Thirds



Figure 4: Does R identify a religious affiliation?