Wage Differentials in the United States: Does Religion Matter?

Numerous studies have examined the relationship between religion and various socio-economic outcomes including education, women’s employment, fertility and wealth. However, the relationship between religion and wages has received little attention. Using data on Non-Hispanics from the 2005 Panel Study of Income Dynamics (PSID) and separate analyses for men and women, this thesis examines three associations: (1) between religious affiliation and wages; (2) between religious participation and wages; and (3) between religious affiliation and returns to education. The relationships are examined at the mean with Ordinary Least Squares (OLS) and along the wage rate distribution using Quantile regressions (QR). OLS estimates of the association between religion and wages for women show that, consistent with earlier studies, Mainline Protestants (MPs) and Catholics are at the center of the wage distribution; Jews earn higher wages; and conservative Protestants (CPs), Mormons and the no religion group earn lower wages. Analyses for men show similar patterns, with the notable exception that Mormon men have a wage advantage relative to MPs. Very high participation in religious services is found to be associated with lower wages among MP women and men, and also among Catholic men. No significant association between wages and religious participation is found among CP men and women. Lapsed Catholic women not participating in religious activities are found to have a wage advantage relative to those with weekly participation. Consistent with previous findings, differences in returns to education between MP, CP and Catholic women are not significant. A new finding is that among men, CPs stand out for their low returns to education. Results from the QR analyses reveal stronger associations of religion and wages at the upper end of the wage distribution for some of the gender / religious groups. The present results suggest that differences by religion in wages likely are a major contributing factor to the pronounced differences by religion in wealth documented in earlier research. They also suggest the importance of considering the role of religion in future analyses of male-female wage differentials.