Why do individuals differ so persistently in their willingness to take economic risks? This paper investigates whether religiosity, particularly the intensity of religious belief, and helps explain this variation. The research considers two competing theoretical predictions: religious teachings discourage immoral and unlawful behavior, while the religious coping literature suggests that belief in a benevolent God reduces background anxiety and effectively provides psychological insurance. Using Danish administrative data covering the full population over three decades, together with a novel naming-based measure of individual religiosity, the paper finds that more religious individuals are significantly more likely to be self-employed and to hold a larger share of their assets in stocks. These effects are economically meaningful, corresponding to roughly a quarter of the wealth effect on economic risk-taking. The findings also remain significant when comparing individuals within sibling groups, which absorbs family-level confounders. The research further finds that these same individuals are less likely to be charged with a criminal offence. This pattern of opposite effects across different types of risk is consistent with the idea that religiosity reduces perceived background risk through a psychological insurance channel, while simultaneously increasing the perceived cost of behaviours condemned by religious teachings. Overall, the paper suggests that religiosity helps explain a portion of the large and persistent individual differences in risk-taking behavior.

ABOUT THE SPEAKER

Jeanet Sinding Bentzen is a Professor of Economics at the University of Copenhagen, where she also leads the department's PhD program. She is a Research Affiliate at the Centre for Economic Policy Research (CEPR) and the Centre for Competitive Advantage in the Global Economy (CAGE), Associate Editor at The Economic Journal, and Executive Director of the Association for the Study of Religion, Economics, and Culture (ASREC).

Her research lies in the economics of religion field. Using natural experiments and large-scale data, she studies why religiosity differs across the globe and how it shapes societies. Her work shows that crises such as earthquakes and the COVID-19 pandemic raise religiosity, that the divide between devout and secular people is the widest cultural gap on Earth, and that religiosity affects science, democracy, productivity, and conservative attitudes. She has published in The Economic Journal, the American Economic Journal: Applied Economics, the Journal of Development Economics, and Nature Communications, and her findings have been covered by The Economist, The Wall Street Journal, and Freakonomics Radio.