Economics of American Judaism (Routledge Frontiers of Political Economy)

Comments on Economics of American Judaism by Carmel U. Chiswick Carmel Chiswick, almost alone among scholars, focuses on the economics of American Jewish life – everything from the cost of Jewish education to the economics of the Jewish family. Here she conveniently brings together the finest fruits of her work, a bountiful harvest of eye-opening and illuminating studies. This is a book that anyone seriously interested in the hard realities of American Jewish life will seek to read and to ponder. Jonathan D. Sarna, Joseph H. & Belle R. Braun Professor of American Jewish History, Brandeis University; author of American Judaism: A History. ***** Prof. Chiswick’s work on the Economics of American Jews is full of surprising insights and interesting facts. A gift from on high for anyone who wants to be a mayvin at the next bris. Prof. Eli Berman, Economics, UC San Diego ***** Economics of American Judaism is an excellent compilation of articles in which Carmel Chiswick systematically applies economic theory to study various facets of American Judaism. Her analyses shed new light on how the immigrant experience has affected the practice of Judaism in America; how American Judaism has adapted over time to a changing economic environment; and how religious factors influence decisions made by American Jews regarding time allocation, marriage, children, and investments in religious and secular human capital. The innovative analyses in this book – the first efforts in the literature to use economic theory to expand our understanding of American Judaism – make it an indispensable reference for religious leaders and for students and scholars in the field of religious studies. Professor Evelyn L. Lehrer, Economics, U of Illinois at Chicago ***** American Jewish life is usually viewed through the prism of its history and sociology. Utilizing the discipline of economics, Carmel Chiswick’s groundbreaking volume expands and deepens this vision, enabling a more nuanced and multifaceted view of the American Jewish Experience. Dr. Rela Mintz Geffen President & Professor of Sociology Baltimore Hebrew University

Economics of American Judaism

This book collects in one readily-accessible volume the pioneering research of Carmel U. Chiswick on the Economics of American Judaism. Filling a major gap in the social-scientific literature, Chiswick’s economic perspective complements that of other social scientists and historians. She demonstrates clearly that economic analysis can deepen our understanding of the historical experience of American Jewry and provide insights into its current situation. The author applies the methodology of modern labor economics to examine how America’s unique economic environment in the twentieth century provided a context for the ancient Jewish religion to adapt to new circumstances. The development of distinctively American synagogue movements is linked to the economic assimilation of American Jews and their rapidly rising levels of education, social assimilation, and changing family structure. The economic perspective gives a fresh insight into questions of the long-run viability of Judaism in America. In a final section, economic analysis is applied in a novel way to highlight the symbiotic relationship between American and Israeli Judaism. Covering areas such as Jewish Studies, Economics of Religion, Sociology of Religion, and Immigrant Religion this book is required reading for all those interested in how economic environment influences the practice of Judaism in the United States. Carmel U. Chiswick is Professor of Economics at the University of Illinois at Chicago.

Routledge Frontiers of Political Economy

1 Equilibrium Versus Understanding Towards the rehumanization of economics within social theory Mark Addleson 2 Evolution, Order and Complexity Edited by Elias L. Khalil and Kenneth E. Boulding 3 Interactions in Political Economy Malvern after ten years Edited by Steven Pressman 4 The End of Economics Michael Perelman 5 Probability in Economics Omar F. Hamouda and Robin Rowley 6 Capital Controversy, Post Keynesian Economics and the History of Economics Essays in honour of Geoff Harcourt, volume one Edited by Philip Arestis, Gabriel Palma and Malcolm Sawyer

9 New Keynesian Economics/Post Keynesian Alternatives Edited by Roy J. Rotheim 10 The Representative Agent in Macroeconomics James E. Hartley 11 Borderlands of Economics Essays in honour of Daniel R. Fusfeld Edited by Nahid Aslanbeigui and Young Back Choi 12 Value, Distribution and Capital Essays in honour of Pierangelo Garegnani Edited by Gary Mongiovi and Fabio Petri 13 The Economics of Science Methodology and epistemology as if economics really mattered James R. Wible

7 Markets, Unemployment and Economic Policy Essays in honour of Geoff Harcourt, volume two Edited by Philip Arestis, Gabriel Palma and Malcolm Sawyer

14 Competitiveness, Localised Learning and Regional Development Specialisation and prosperity in small open economies Peter Maskell, Heikki Eskelinen, Ingjaldur Hannibalsson, Anders Malmberg and Eirik Vatne

8 Social Economy The logic of capitalist development Clark Everling

15 Labour Market Theory A constructive reassessment Ben J. Fine

16 Women and European Employment Jill Rubery, Mark Smith, Colette Fagan and Damian Grimshaw 17 Explorations in Economic Methodology From Lakatos to empirical philosophy of science Roger Backhouse 18 Subjectivity in Political Economy Essays on wanting and choosing David P. Levine 19 The Political Economy of Middle East Peace The impact of competing trade agendas Edited by J.W. Wright, Jnr

25 The End of Finance Capital market inflation, financial derivatives and pension fund capitalism Jan Toporowski 26 Political Economy and the New Capitalism Edited by Jan Toporowski 27 Growth Theory A philosophical perspective Patricia Northover 28 The Political Economy of the Small Firm Edited by Charlie Dannreuther 29 Hahn and Economic Methodology Edited by Thomas Boylan and Paschal F. O’Gorman

20 The Active Consumer Novelty and surprise in consumer choice Edited by Marina Bianchi

30 Gender, Growth and Trade The miracle economies of the postwar years David Kucera

21 Subjectivism and Economic Analysis Essays in Memory of Ludwig Lachmann Edited by Roger Koppl and Gary Mongiovi

31 Normative Political Economy Subjective freedom, the market and the state David Levine

22 Themes in Post-Keynesian Economics Essays in honour of Geoff Harcourt, volume three Edited by Claudio Sardoni and Peter Kriesler

32 Economist with a Public Purpose Essays in honour of John Kenneth Galbraith Edited by Michael Keaney 33 Involuntary Unemployment The elusive quest for a theory Michel De Vroey

23 The Dynamics of Technological Knowledge Cristiano Antonelli

34 The Fundamental Institutions of Capitalism Ernesto Screpanti

24 The Political Economy of Diet, Health and Food Policy Ben J. Fine

35 Transcending Transaction The search for self-generating markets Alan Shipman

36 Power in Business and the State An historical analysis of its concentration Frank Bealey 37 Editing Economics Essays in honour of Mark Perlman Hank Lim, Ungsuh K. Park and Geoff Harcourt 38 Money, Macroeconomics and Keynes Essays in honour of Victoria Chick Volume 1 Philip Arestis, Meghnad Desai and Sheila Dow 39 Methodology, Microeconomics and Keynes Essays in honour of Victoria Chick, Volume Two Philip Arestis, Meghnad Desai and Sheila Dow

46 Unpaid Work and the Economy Edited by Antonella Picchio 47 Distributional Justice Theory and measurement Hilde Bojer 48 Cognitive Developments in Economics Edited by Salvatore Rizzello 49 Social Foundations of Markets, Money and Credit Costas Lapavitsas 50 Rethinking Capitalist Development Essays on the economics of Josef Steindl Edited by Tracy Mott and Nina Shapiro 51 An Evolutionary Approach to Social Welfare Christian Sartorius

40 Market Drive and Governance Reexamining the rules for economic and commercial contest Ralf Boscheck

52 Kalecki’s Economics Today Edited by Zdzislaw L. Sadowski and Adam Szeworski

41 The Value of Marx Political economy for contemporary capitalism Alfredo Saad-Filho

53 Fiscal Policy from Reagan to Blair The Left veers Right Ravi K. Roy and Arthur T. Denzau

42 Issues in Positive Political Economy S. Mansoob Murshed

54 The Cognitive Mechanics of Economic Development and Institutional Change Bertin Martens

43 The Enigma of Globalisation A journey to a new stage of capitalism Robert Went 44 The Market Equilibrium, stability, mythology S.N. Afriat 45 The Political Economy of Rule Evasion and Policy Reform Jim Leitzel

55 Individualism and the Social Order The social element in liberal thought Charles R. McCann Jnr. 56 Affirmative Action in the United States and India A comparative perspective Thomas E. Weisskopf

57 Global Political Economy and the Wealth of Nations Performance, institutions, problems and policies Edited by Phillip Anthony O’Hara 58 Structural Economics Thijs ten Raa 59 Macroeconomic Theory and Economic Policy Essays in honour of Jean-Paul Fitoussi Edited by K. Vela Velupillai 60 The Struggle Over Work The “end of work” and employment alternatives in post-industrial societies Shaun Wilson 61 The Political Economy of Global Sporting Organisations John Forster and Nigel Pope 62 The Flawed Foundations of General Equilibrium Theory Critical essays on economic theory Frank Ackerman and Alejandro Nadal 63 Uncertainty in Economic Theory Essays in honor of David Schmeidler’s 65th birthday Edited by Itzhak Gilboa 64 The New Institutional Economics of Corruption Edited by Johann Graf Lambsdorff, Markus Taube and Matthias Schramm

67 Culture and Politics in Economic Development Volker Bornschier 68 Modern Applications of Austrian Thought Edited by Jürgen G. Backhaus 69 Ordinary Choices Individuals, incommensurability, and democracy Robert Urquhart 70 Labour Theory of Value Peter C. Dooley 71 Capitalism Victor D. Lippit 72 Macroeconomic Foundations of Macroeconomics Alvaro Cencini 73 Marx for the 21st Century Edited by Hiroshi Uchida 74 Growth and Development in the Global Political Economy Social structures of accumulation and modes of regulation Phillip Anthony O’Hara 75 The New Economy and Macroeconomic Stability A neo-modern perspective drawing on the complexity approach and Keynesian economics Teodoro Dario Togati

65 The Price Index and its Extension A chapter in economic measurement S.N. Afriat

76 The Future of Social Security Policy Women, work and a citizens basic income Ailsa McKay

66 Reduction, Rationality & Game Theory in Marxian Economics Bruce Philp

77 Clinton and Blair The political economy of the third way Flavio Romano

78 Marxian Reproduction Schema Money and aggregate demand in a capitalist economy A.B. Trigg 79 The Core Theory in Economics Problems and solutions Lester G. Telser 80 Economics, Ethics and the Market Introduction and applications Johan J. Graafland 81 Social Costs and Public Action in Modern Capitalism Essays inspired by Karl William Kapp’s theory of social costs Edited by Wolfram Elsner, Pietro Frigato and Paolo Ramazzotti 82 Globalization and the Myths of Free Trade History, theory and empirical evidence Edited by Anwar Shaikh 83 Equilibrium in Economics Scope and limits Edited by Valeria Mosini 84 Globalization State of the art and perspectives Edited by Stefan A. Schirm 85 Neoliberalism National and regional experiments with global ideas Edited by Ravi K. Roy, Arthur T. Denzau and Thomas D. Willett 86 Post-Keynesian Macroeconomics Essays in honour of Ingrid Rima Edited by Mathew Forstater, Gary Mongiovi and Steven Pressman

87 Consumer Capitalism Anastasios S. Korkotsides 88 Remapping Gender in the New Global Order Edited by Marjorie Griffin Cohen and Janine Brodie 89 Hayek and Natural Law Eric Angner 90 Race and Economic Opportunity in the Twenty-First Century Edited by Marlene Kim 91 Renaissance in Behavioural Economics Harvey Leibenstein’s impact on contemporary economic analysis Edited by Roger Frantz 92 Human Ecology Economics A new framework for global sustainability Edited by Roy E. Allen 93 Imagining Economics Otherwise Encounters with identity/difference Nitasha Kaul 94 Reigniting the Labor Movement Restoring means to ends in a democratic labor movement Gerald Friedman 95 The Spatial Model of Politics Norman Schofield 96 Economics of American Judaism Carmel U. Chiswick

Economics of American Judaism

Carmel U. Chiswick

First published 2008 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN Simultaneously published in the USA and Canada by Routledge 270 Madison Ave, New York, NY 10016 This edition published in the Taylor & Francis e-Library, 2008. “To purchase your own copy of this or any of Taylor & Francis or Routledge’s collection of thousands of eBooks please go to www.eBookstore.tandf.co.uk.” Routledge is an imprint of the Taylor & Francis Group, an informa business © 2008 Carmel U. Chiswick All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data Chiswick, Carmel U. Economics of American Judaism / Carmel Chiswick. p. cm. Includes bibliographical references and index. 1. Jews – United States – Economic conditions. I. Chiswick, Carmel, U. II. Title. E184.36.E25C48 2008 330.9'174924–dc22 ISBN 0-203-79930-5 Master e-book ISBN ISBN10: 0–415–70157–0 (hbk) ISBN10: 0–203–79930–5 (ebk) ISBN13: 978–0–415–70157–0 (hbk) ISBN13: 978–0–203–79930–7 (ebk)

2007029186

To Barry, Abraham and Benjamin

Contents

List of figures List of tables Foreword Acknowledgements

xv xvii xix xxi

PART I

Overview 1 Introduction

1 3

2 First approach: the economics of American Judaism

12

3 A retrospective: the economics of American Judaism

27

PART II

Immigrants

37

4 The economics of Jewish immigrants and Judaism in the United States

39

5 Economic transformation of American Jewry

53

WITH BARRY R. CHISWICK

PART III

Marriage and family

59

6 The economics of contemporary American Jewish family life

61

7 Determinants of religious intermarriage: are Jews really different?

78

xiv

Contents

PART IV

Jewish continuity 8 An economic perspective on religious education: complements and substitutes in a human-capital portfolio 9 The cost of living Jewishly and Jewish continuity

89

91 107

WITH BARRY R. CHISWICK

10 The economics of Jewish continuity

118

PART V

Israel and American Jewry

139

11 Impact of the Six-Day War on American Jewry: an economic perspective

141

12 Israel and American Jewry in the year 2020: an economic analysis

149

13 Immigrant impacts on Israel’s labor force: implications for economic development

169

Index

175

Figures

4.1 8.1 8.2 8.3 8.4 8.5 10.1a 10.1b

The earnings of immigrants relative to natives Optimal investment in education without externalities Optimal investment with negative supply-side externalities Preferences and negative supply-side externalities Discontinuity constraints on optimal investment Optimal investment with adaptations in Jewish practice Hospitable environment Antagonistic environment

41 95 96 97 98 102 128 128

Tables

2.1 2.2 2.3 4.1 6.1 6.2 6.3 6.4 7.1 7.2 7.3 7.4 11.1

Occupation shifts over time: adult Jewish men Labor force participation of adult Jewish women Education of adult American Jews: highest degree attained by age and sex Denominations of Jewish adults, 1970 and 1990 Occupation shifts over time: adult Jewish men Outmarriage rates by denomination raised Marital status by age and sex Marital fertility by age Outmarriage rate among American Jews, 1990 Stability of first marriages among American Jews, 1990 Outmarriages and marital stability by denomination raised Marital stability by spouse’s religion U.S. immigration to Israel 1948–1991

14 16 17 46 64 70 71 73 78 80 83 84 147

Foreword

You hold in your hands the world’s first treatise on the economics of American Judaism. Do not mistake it for some dry and dusty tome on synagogue finances, rabbinic pay scales, or Jewish philanthropy. This is a study of Jewish life. Its chapters run the gamut from Jewish immigration, education, and economic advancement, to Jewish fertility, intermarriage, and religious practice. No other book offers so many fresh insights about the identities, experiences, and institutions of American Jews. Carmel Chiswick is one of the few brave souls who have labored for many years to apply the tools of economic science to the study of religious belief and behavior. With the benefit of hindsight, we can now declare that the economics of religion most certainly deserves its newfound status as a rapidly growing field that both complements and challenges the claims of religious studies and the sociology of religion. But when Professor Chiswick began her studies, it took tremendous courage to fly in the face of conventional wisdom, which viewed religious belief and practice as the absolute antithesis of economic theory and action. And it likewise took tremendous creativity and skill to fruitfully apply standard economic concepts (of rational choice, opportunity cost, commodity production, human capital, supply and demand, monopoly versus competition, and much more) to a “marketplace” populated by churches, synagogues, and mosques. Do not suppose that you must be an economist or Jewish (much less a Jewish economist) to appreciate this book. Professor Chiswick does a remarkable job of making both economic theory and Jewish life accessible to any educated reader. And although she never claims to have produced a general treatise on American religion, I am struck by how many of her insights carry over to Protestants and Catholics – including those regarding family life, intermarriage, the impact of increased education, the costs of traditional religious practice, the nature of religious human capital, and the response of religious institutions to increased wages and labor force participation. As 20th-century American Jews rocketed up the socio-economic ladder, they adapted traditional Jewish religious practices to better fit their new economic and social situation – including increased income, education, mobility, and pluralism. Jewish practice became less time-intensive, more family-oriented, more egalitarian, and more compatible with American lifestyles. Problems of assimilation and

xx

Foreword

secularization by no means disappeared, but American Judaism would be much less vital were it not for the creative and competing “market strategies” of Reform, Conservative, and Orthodox congregations. Indeed, we can extend this insight to the entire religious economy: American religion is so remarkably durable precisely because it is so remarkably dynamic, and this dynamism is the product of innovation and competition fueled by two centuries of religious laissez faire. Economics of American Judaism is the work of an extraordinary scholar, skilled enough to develop a new approach to the study of Jewish life, brave enough to push that approach to its logical conclusions, and sensitive enough to discern both its power and limitations. Laurence R. Iannaccone Koch Professor of Economics and Director, Center for the Economic Study of Religion George Mason University

Acknowledgements

The work presented in this volume benefited tremendously from the encouragement of social scientists working on Jewish subjects. I am indebted to the sociologists Rela Mintz Geffen and Sergio DellaPergola, who each encouraged me in my early efforts in this field. I am also indebted to my husband, Barry R. Chiswick, who encouraged me to pursue my interest in the economics of religious observance and to share my findings with the Jewish community. I owe a special debt of gratitude to the economist Tikva Lecker (z”1) of Bar Ilan University. Professor Lecker’s enthusiasm for applying economics to the subject of Judaism led us to collaborate on a series of conferences that would give a forum to other economists who joined us in this endeavor. Papers from the first of these conferences were published in a special issue of Contemporary Jewry, edited by Dr Geffen and guest-edited by Professor Lecker and me, a true milestone in the dissemination of economics research to other social scientists working in Jewish Studies.1 Papers from the second conference were published as part of a book on the Economics of Judaism.2 A third conference, organized in memory of Professor Lecker shortly after her untimely death and devoted more broadly to her many research interests, was published as a special issue of Research in Labor Economics.3 Finally, I wish to express my gratitude to the editors at Routledge who have encouraged me to collect these papers into the present volume and to the following publishers for permission to reprint my papers here. “An Economic Perspective on Religious Education: Complements and Substitutes in a Human Capital Portfolio.” was published in Research in Labor Economics edited by S. Polachek, Vol. 24 (2006), pp. 429–467. Reprinted with permission from Elsevier. “The Economics of American Judaism.” was published in The Cambridge Companion to American Judaism edited by D. E. Kaplan (2005), pp. 317–327. Reprinted with permission from Cambridge University Press. “The Economics of Contemporary American Jewish Family Life” was published in Studies in Contemporary Jewry edited by P. Medding, Vol. 14 (1999), pp. 65–80. Reprinted with permission from Oxford University Press. “The Economics of American Judaism” was published in Shofar edited by J. Haberer, Vol. 13:4 (Summer 1995), pp. 1–19. Reprinted with permission from Purdue University Press.

xxii

Acknowledgements

New Jewrish Time: Jewrish Culture in a Secular Age – An Encyclopedic View, Hebrew Edition, Editor in Chief: Yirmiyahu Yovel, Initiator, director and editor: Yair Tzaban, General Editor David Shaham, Keter Publishing House, Israel 2007. The following articles were published in Contemporary Jewry, the journal of the Association for the Social Scientific Study of Jewry, and are reprinted here with permission. “The Cost of Living Jewishly and Jewish Continuity” (with B. Chiswick), Contemporary Jewry 21 (2000), pp. 78–90. “The Economics of Jewish Continuity,” Contemporary Jewry 20 (1999), pp. 30–56. The following articles were published in Papers in Jewish Demography, the Harmon Institute of Contemporary Jewry, Hebrew University of Jerusalem, and are reprinted here with permission. “Immigrant Impacts on Israel’s Labor Force: Implications for Economic Development,” Papers in Jewish Demography 1989, pp. 253–257. “The Economics of Jewish Immigrants and Judaism in the United States.” Papers in Jewish Demography 1997 (2001), pp. 331–344. “Determinants of Religious Intermarriage: Are Jews Really Different?” Papers in Jewish Demography 1993, pp. 247–257. The following articles were published only in Hebrew translation. “Economic Transformation of American Jewry” (with Barry R. Chiswick). In New Jewrish Time: Jewrish Culture in a Secular Age – An Encyclopedic View, Hebrew Edition, Editor in Chief: Yirmiyahu Yovel, Initiator, director and editor: Yair Tzaban, General Editor David Shaham, Keter Publishing House, Israel 2007. “Israel and American Jewry in the Year 2020: An Economic Analysis” in Israel and the Jewish People (Anat Gonen & Smadar Fogel, eds.). Israel 2020: Master Plan for Israel in the Twenty-first Century. The Macro Scenarios. Haifa: Technion, 1996, pp. 257–272. (Hebrew). The publishers would be grateful to hear from any copyright holder who is not here acknowledged and will undertake to rectify any errors or omissions in future editions of this book.

Notes 1 Carmel U. Chiswick and Tikva Lecker, The Economics of Judaism and Jewish Observance. Contemporary Jewry 20. 1999. 2 Carmel U. Chiswick, et al., Jewish Society and Culture: An Economic Perspective. Ramat Gan:Bar Ilan University Press, 2007. 3 Solomon W. Polachek, Carmel Chiswick and Hillel Rapoport, The Economics of Immigration and Social Diversity. Oxford: Elsevier, Research in Labor Economics 24. 2006.

Part I

Overview

1

Introduction

When I was still an impressionable young student, my teacher announced that Economics is not a subject, but rather a discipline. His point was that once we had mastered the analytical tools of our trade we would be able to apply them to any subject that interested us. This was an especially liberating concept for me, who at the time shared in the popular notion that economists mainly studied interest rates and the stock market. My teacher was Gary S. Becker, who would go on to win the 1992 Nobel Prize in Economics for opening up many new subject areas for economic analysis. Despite initial fears that economists were trying to “take over” the domain of other social scientists, it turned out that the insights provided by economic analysis mainly complemented those of the other social science disciplines and greatly enriched our understanding of the subject areas. It was in this spirit that I began my own research into the economics of Judaism, hoping to enrich our understanding of the American Jewish community and to contribute an economic perspective to the design of Jewish communal policy.

I. Background Long before turning my attention to this area of research, I had become accustomed to “thinking like an economist” both inside the classroom and out. Economics is defined formally as the study of resource allocation when resources are limited and there are multiple goals. This is a reasonable description of life in general, especially the life of a middle-class, middle-income American Jewish parent such as myself. My husband (also an economist) and I were familiar with recent work on the economics of the family, especially resource-allocation decisions related to marriage, divorce, childbearing, and childrearing. It was only natural for us to apply this analysis in thinking through our own resource-allocation problems, the money- and time-budget trade-offs typically absorbing attention in any family. Without really noticing it at the time, we found ourselves relying especially heavily on economic concepts when thinking through the tradeoffs between our observance of Judaism and the many other facets of our professional and social lives. How would our Jewish observance in the home and in the synagogue

4

Economics of American Judaism

conflict with or complement our other activities and goals? How could we best balance our Jewish and general interests when selecting our reading matter, cultural activities, and social life? How do we educate our children in both Jewish and secular subjects so that they will be prepared to participate fully in all dimensions of American life, both Jewish and secular? These were some of the most difficult issues that engaged us in our personal lives, and they were the very same problems that the discipline of economics had equipped us to analyze. With this as background, I managed to function reasonably well as a university professor, a suburban wife, mother and daughter, and an affiliated member of the Jewish community. My children attended a Jewish day-school that strove to integrate Jewish and secular subjects, seeking a balance that was fairly consistent with the balance I sought in my own life. I had no notion of being any different than the other parents in that school. We were all fundamentally concerned with the same difficult issues of allocating limited resources – time and money, but especially time – among multiple objectives. One day, however, I was caught up short in a conversation with a friend whose difficulty solving a problem involved a simple economic confusion. I was forcibly reminded that not everyone had the economist’s way of thinking through problems that many Jews were grappling with, groping awkwardly toward solutions that economic analysis could help them find more readily. A bit of thought on the subject led me to realize that this problem was widespread in the Jewish community, including its leadership and the entire Jewish Studies profession. My instincts as a teacher immediately kicked in, and I began on a research path that has resulted in the present volume. The first reactions to this work were instructive. The few economists studying religion welcomed an informed focus on American Judaism, but at that time most other economists were skeptical of the appropriateness of studying religion and many Jewish economists expressed discomfort at my applying it to Judaism. The subject of economics did not attract many people in the Jewish community, but informal presentations to small groups were often met with expressions of selfrecognition and enlightenment. Formal presentations to scholars at Jewish Studies meetings were just as often met with the kind of silence that suggests (at best) tolerance of an eccentric outsider. From these reactions I concluded that there was indeed a need for research in this area, and with a lot of encouragement from my husband, colleagues, and friends I persevered. It is with great satisfaction that I can now say that economics is no longer a blind spot in the field of Jewish Studies.

II. The studies The papers collected in this volume document the progression of my work on the Economics of American Judaism. Most of them have been published in the scholarly literature that applies the social science disciplines to Jewish Studies. They are arranged not chronologically but in groups reflecting their subject matter. After a brief overview section, there is a section on the assimilation of Jewish

Introduction

5

immigrants in the United States, a section on marriage and family, and a section on issues related to Jewish continuity. A final section explores economic aspects of the relationship between American Jewry and Israel. The two papers in Part I each provide an introduction to the economics of American Judaism. Although they both share the same title, they were published a decade apart and approach the subject from very different perspectives. The first appeared in 1995 in Shofar, the journal of the Midwest Jewish Studies Association. This was early in my research when few scholars seemed to be interested, and at the time I expected this to be my one and only publication on the subject. I therefore gave it a grand title, “The Economics of American Judaism,” included an explanation of economic concepts and how they could be used to analyze Jewish observance, and tried to apply these tools to as many topics as I could in a single paper. It was designed to show how an economist’s analytical tools could be used to shed light on what seemed to be a gaping hole in the literature on American Judaism. It was also designed as a teaser, to suggest the range of issues in Jewish communal life for which an economic perspective would be helpful. In hindsight, this paper served as an agenda for my future research, much of which is included in this volume. Although this original paper was pioneering in the field of Jewish Studies, it built on the work of other economists and could not have been written without them. A few years earlier, Lawrence Iannaccone had begun his seminal research on the economics of religion, virtually inventing a new branch of economics as he attracted more and more interest in this subject.1 Nearly all of his early work focused on issues pertaining to Protestantism, in part because of interest in the subject, and in part because the statistical data on American religion is dominated by its very large Protestant majority. Yet the economic theory that developed was more general and in my eyes cried out for application to Judaism. Also, a few years earlier, Barry R. Chiswick (my husband and colleague) had constructed and published some new data on the labor market experience of Jewish men and women.2 This came out of his research on the labor market experience of various ethnic groups composed of the descendents of immigrants, providing us with the first consistent time series data for studying American Jewish occupations and for comparing the labor market experience of Jewish and non-Jewish American men and women. It also broke through an implicit but nevertheless strong resistance in the economics profession to identifying Jews as an ethnic group and studying their economic behaviors. I was fortunate to be familiar with both of these new lines of economics research, which gave me the tools and the encouragement to embark on my study of American Judaism. The second paper in Part I, also titled “The Economics of American Judaism,” is an overview of the subject from a very different direction. It was published a full decade later and appeared in the Cambridge Companion to American Judaism, a text and reference book whose 23 chapters are designed to introduce the subject from a variety of perspectives. The fact that one of these chapters is devoted to economics suggests that economics is no longer a blind spot in the field of Jewish Studies, but is now recognized for the insights it can yield to our

6

Economics of American Judaism

understanding of the Jewish experience. Despite the similarity of their titles, this second paper focuses less on the methodology of economics and provides a synthesis of findings from a growing body of research, much of which is included in this volume. The two papers in Part II consider how the adjustment of Jewish immigrants to the American economy affected the distinctive religious culture of American Judaism. The experience of turn-of-the-(twentieth)-century Jewish immigrants is by now familiar, an important part of the origin story for today’s American Jews and a rich subject for historians, biographers and novelists. Yet economists have not paid much attention to this experience even though economics was a central concern for Jewish immigrants and their descendents. Economists have paid even less attention to the incentives inducing changes in Judaism per se, the development of distinctively American religious attitudes and styles of Jewish observance. The two papers in this section view the economic adjustment of Jewish immigrants as a central part of the story of how American Judaism evolved from an immigrant religion imported from the old country to a suburban middle-class American Judaism comprised mostly of Reform and Conservative synagogues. In Part II a modern economic theory of immigrant adjustment serves as a framework for an analysis of how the immigrant experience affected the development of Judaism in the United States. As in the previous section, this novel approach was made possible by new work in two related fields. I was greatly influenced by the work of R. Stephen Warner, a sociologist whose major project at that time involved the “immigrant churches” in today’s United States.3 His project showed how religious establishments could provide a “safe haven” in the stressful world of a new immigrant, could facilitate their socio-economic adjustment, and could themselves eventually become “Americanized” along with their members. Barry R. Chiswick’s pioneering work on the economic adjustment of immigrants and their second-generation offspring provided an analytical framework for viewing this process from an economic perspective.4 My own contribution has been to combine these two approaches and apply them to the historical case of American Jewish immigrants and their descendents. The first paper in this section, “The Economics of Jewish Immigrants and Judaism in the United States,” views American Judaism at the turn of the twentieth century as an “immigrant church.” It traces the economic adjustment of the immigrant community and shows how this influenced their choices as consumers and participants in religious observance. It also considers how Jewish communal (but essentially non-religious) organizations were affected by this process. The analysis highlights a useful distinction between organizations that were specific to an upwardly-mobile immigrant Jewish community and those that are best suited to the fully-Americanized Jewish community of the twenty-first century. The second paper in this section, “The Economic Transformation of American Jewry,” was written a decade later and synthesizes the findings of research in the intervening years. Aimed at a general audience, it describes the immigrant

Introduction

7

adjustment process and relates it to the development of American forms of Jewish religious expression. This article was prepared jointly with Barry Chiswick for The Encyclopedia of Jewish Culture, again bearing witness to the recognition of economics as a useful field for studying the Jewish experience.5 It was translated into Hebrew for the Encyclopedia in which it was published, appearing here for the first time in its original language. Part III contains two papers on the Jewish family. “The Economics of Contemporary American Jewish Family Life” uses the tools of economic demography to analyze how economic forces have affected patterns of marriage, fertility, and family life of American Jews. Economic demography is itself a relatively new field within the social sciences that applies modern economic tools to the analysis of demographic issues. Written for a symposium on Jewish families at about the same time as my work on immigrant religion, it shows how changes in the economic environment as Jews assimilated into the American labor market induced changes in family size and composition. It also looks at the life-cycle patterns of American Jewish families and briefly considers the incidence of outmarriage. Outmarriage is the main subject of “Determinants of Religious Intermarriage: Are Jews Really Different?” This work draws heavily on an article co-authored with Evelyn Lehrer analyzing how religion affects the probability that a marriage would last at least ten years.6 That article was based on a particularly useful set of data that pertained mainly to Protestants, the sample size for Jews being too small to obtain useful results. The article presented here used data from the National Jewish Population Survey of 1990 to look at the comparable Jewish experience. As I thought about the economic forces underlying these fundamental changes in Judaism in the United States, an obvious question emerged. Do these changes lead inevitably to a loss of Jewish identity as individuals assimilate into the American mainstream? Or is American Judaism just one more adaptation in a long history of Jewish adaptations to a new environment, the successful culmination of a process that began with the European Enlightenment of the eighteenth century? My research on the religious adjustment of American immigrants was suggesting that perhaps both were true, that American Jewry was split between those who were assimilating completely and those who were inventing a new Jewish future. The papers in Part IV of this volume use other economic perspectives to shed additional light on the adaptation of Judaism to new environments. “An Economic Perspective on Religious Education” looks at the educational process itself, focusing on the tradeoffs faced by parents seeking the appropriate mix of religious and general (secular) education. Education is viewed as a production process in its own right, the efficiency of which is enhanced by synergies between religious and general education and undermined by any conflicts or inconsistencies between them. This analytical framework is used to look at various strategies adopted by American religious groups, including the emergence of a separate Catholic school system early in the twentieth century, the Protestant split between groups that embrace general education and those that are

8

Economics of American Judaism

suspicious of it, and the complete restructuring of Jewish education to improve its synergies with high levels of general or secular education. The second paper in Part IV, “The Cost of Living Jewishly and Jewish Continuity” co-authored with Barry R. Chiswick, looks at economic forces that affect the communal life of American Jewry. The economic theory of “clubs” is concerned with groups where the benefit of participation for any given member is significantly affected by the number of other participants and their level of involvement in the group. The Jewish community, including the synagogue itself, is viewed here as a club in this sense. This exercise has useful implications for understanding the rise and fall of ancillary synagogue organizations as the Jewish community has changed over the course of the twentieth century, and also for the steady weakening of a Jewish marriage market. This analysis is also suggestive of characteristics that are successful in attracting members. The third paper in this group places the question in the broader perspective of Jewish history. “The Economics of Jewish Continuity” was written in the spirit of economic history, applying the basic analytical tools of economics to Jewish adaptations to a changing economic environment in earlier times and other places. Its central concern is with conditions that allow a Jewish community to successfully balance its religious life with secular achievement that persists in the long run. The historical evidence is sparse because historians have rarely been guided by the analytical framework of an economist. This paper provides such a framework and thus raises new questions for historical investigation. Part V, the final section of this collection, contains three papers dealing with various aspects of the Jewish experience in Israel and its relationship with American Jewry. As its title suggests, “Impact of the Six-Day War on American Jewry” was my contribution on the twenty-fifth anniversary of that event to a conference where scholars from various disciplines reflected on the war’s effects for Diaspora Jewry. Published here for the first time, the ideas in this paper and conversations with other scholars at the conference stimulated my thinking about how Israel has affected the economic environment of American Judaism. As a consequence I was invited by the Jewish Agency for Israel to join an effort to project 25 years into the future the relationships between Israel and Diaspora Jewish communities.7 My contribution to this project, “Israel and American Jewry in the Year 2020: An Economic Analysis,” was translated into Hebrew for that report. It appears here for the first time in its original English language. “Immigrant Impacts on Israel’s Labor Force: Implications for Economic Development” was based on a theoretical article I had recently published on the effects of high immigration levels on a country’s economic development.8 The model in that paper paid special attention to a distinction between skilled and unskilled immigrants, and generated hypotheses that were tested with data for the United States. The article included in the present volume applied the same analysis to Israel’s experience with mass immigration. It concluded that although Israel’s Jewish immigration policy was very costly in the short run, it raised incentives to expand higher education and thus contributed to Israel’s rapid transformation into a technologically advanced modern economy.

Introduction

9

This paper on the impact of immigrants on Israel’s economy is the only one included in this volume that does not deal with American Jewry. However it was my very first paper on a Jewish subject and in some ways was indirectly responsible for much of the work that followed. It was originally presented in 1989 on a panel organized by Sergio DellaPergola for the World Congress of Jewish Studies and published by him as editor of Papers in Jewish Demography 1989. My experience at this conference was very stimulating on many levels. Professor DellaPergola has been very supportive of my research on Judaism ever since, for which I am grateful, and I have been able to present a new paper every four years at each subsequent meeting of the World Congress of Jewish Studies. I include this first article in the present volume in part by way of acknowledging this important source of intellectual stimulation and support.

III. The economics of American Judaism: a thumbnail sketch Taken as a whole, the papers in this collection illustrate some of the ways in which the economic environment influences the practice of Judaism in the United States and has informed the development of distinctively American Jewish institutions. Immigrants were the large majority of American Jews in the early twentieth century, as were their upwardly-mobile children in mid-century and their assimilated American grandchildren at its end. The story of immigrant adjustment and occupational mobility is thus central to the experience of American Jewry. Although historians and sociologists have presented much evidence to this effect, until now there has been virtually no attention paid by economists to this quintessentially economic experience. As the papers in this volume suggest, a rich body of research on the economics of immigration and immigrant adjustment in recent decades is now available to remedy this situation. The economic analysis of immigrant adjustment also provides a useful perspective for comparing the Jewish experience with that of non-Jewish immigrants. Although the successful labor force assimilation of Jews was much more rapid than most other immigrant groups at the time, the path they followed was otherwise fairly typical. The differences were pronounced in mid-century, when the children of Jewish immigrants had achieved remarkable success. This was partly due to the Jewish enthusiasm for secular education, but it was also attributable to their arrival at a serendipitous moment in American economic history. The “second industrial revolution,” which began in the 1880s more or less concurrent with the period of mass immigration, placed a very large earnings premium on technical and scientific skills of all sorts. The United States would lead the world in this technology in large part because its system of public schooling would make possible mass education in technical and scientific subjects, interpreting this broadly to include the social sciences and business fields. Jews who took advantage of this opportunity would be in a good position to benefit from this development and would find themselves at the forefront of many new occupations and technological frontiers. Although the children and

10

Economics of American Judaism

grandchildren of other immigrant groups would also acquire secular education and achieve upward economic mobility, most would do so later in this technological cycle and so miss the exhilarating experience of developing new fields. With their energies so absorbed with the problems of economic assimilation and the excitement of technological change, it is no coincidence that their practice of Judaism was also affected. Attractive economic opportunities raised the value of their time, making time-intensive traditions very costly and inducing time-saving innovations in Jewish observance. Most Jews of that period chose to spend little time in the synagogue and the children of immigrants often received little or no formal instruction in religious matters. The religious leadership of the Jewish community sought ways to “Americanize” religious observance that were consistent with both the high cost of time and the intellectual sophistication of the rank and file. Accepting reduced synagogue attendance as inevitable, the goal was to enrich the experience of infrequent congregants. They also sought to design a Jewish education curriculum suitable for students with high secular ambitions. Of the many strategies devised to cope with this situation, the most popular were the Reform, Conservative and Orthodox synagogue movements that came to define American Judaism and distinguish it from Judaism in other countries. With hindsight, and in the light of recent research on “immigrant churches,” the religious problems experienced by Jewish immigrants were typical in many ways of other immigrant groups. Jews were active problem-solvers in an economy that valued such skills, so it was only natural that the community sought innovative solutions to its problems of religious disaffection and/or laxity. The American synagogue movements were successful in many ways, but many Jews have assimilated – and are assimilating – into the secular American mainstream and out of Judaism. The Jewish community and its synagogues are still facing this challenge by devising new religious adaptations, the ultimate success of which will depend importantly on how consistent they are with the economic environment of American Jewry.

Notes 1 Laurence R. Iannaccone, “A Formal Model of Church and Sect”. American Journal of Sociology 94:Supplement (1988). pp.S241–S268, “Religious Practice: A Human Capital Approach”. Journal for the Scientific Study of Religion 29:3 (1990). pp.297–314, “Introduction to the Economics of Religion”. Journal of Economic Literature 36 (1998). pp.1465–1496. 2 Barry R. Chiswick, “The Earnings and Human Capital of American Jews”. Journal of Human Resources 18 (1983). pp.313–336, “The Postwar Economy of American Jews”. Studies in Contemporary Jewry 8 (1992). pp.85–101, “The Skills and Economic Status of American Jewry: Trends over the Last Half Century”. Journal of Labor Economics 11:1, Part 1: Essays in Honor of Jacob Mincer (1993). pp.229–242. 3 R. Stephen Warner and Judith G. Wittner, Gatherings in Diaspora: Religious Communities and the New Immigration. Philadelphia:Temple University Press, 1998. I also learned a great deal from R. Stephen Warner, “Work in Progress toward a New Paradigm for the Sociological Study of Religion in the United States”. American Journal of Sociology 98:5 (1993). pp.1044–1093.

Introduction

11

4 Barry R. Chiswick, “The Effect of Americanization on the Earnings of Foreign-born Men”. Journal of Political Economy 86:5 (1978). pp.897–921. See also Barry R. Chiswick, “Sons of Immigrants: Are They at an Earnings Disadvantage?” American Economic Review 67:February (1977). pp.376–380. 5 Barry R. Chiswick and Carmel U. Chiswick, “Economic Transformation of American Jewry” in (Hebrew) (ed.), New Jewish Time: The Encyclopedia of Jewish Culture. Jerusalem:Lamda (Assoc. for Modern Jewish Culture), 2007, Vol. D, pp. 101–106. 6 Evelyn L. Lehrer and Carmel U. Chiswick, “Religion as a Determinant of Marital Stability”. Demography 30:3 (1993). pp.385–404. 7 Anat Gonen and Smadar Fogel, Israel and the Jewish People. (Israel 2020: Master Plan for Israel in the Twenty-First Century. The Macro Scenarios). Haifa:Technion, 1996. 8 Carmel U. Chiswick, “The Impact of Immigration on the Human Capital of Natives”. Journal of Labor Economics 7 (1989). pp.464–486.

References Chiswick, B. R. (1977). “Sons of Immigrants: Are They at an Earnings Disadvantage?” American Economic Review 67(February): 376–380. Chiswick, B. R. (1978). “The Effect of Americanization on the Earnings of Foreign-born Men.” Journal of Political Economy 86(5): 897–921. Chiswick, B. R. (1983). “The Earnings and Human Capital of American Jews.” Journal of Human Resources 18: 313–336. Chiswick, B. R. (1992). “The Postwar Economy of American Jews.” Studies in Contemporary Jewry 8: 85–101. Chiswick, B. R. (1993). “The Skills and Economic Status of American Jewry: Trends over the Last Half Century.” Journal of Labor Economics 11(1, Part 1: Essays in Honor of Jacob Mincer): 229–242. Chiswick, B. R. and C. U. Chiswick (2007). “Economic Transformation of American Jewry”. New Jewish Time: The Encyclopedia of Jewish Culture. (Hebrew). Jerusalem: Lamda (Assoc. for Modern Jewish Culture). Chiswick, C. U. (1989). “The Impact of Immigration on the Human Capital of Natives.” Journal of Labor Economics 7: 464–486. Gonen, A. and S. Fogel, Eds. (1996). Israel and the Jewish People. Israel 2020: Master Plan for Israel in the Twenty-First Century. The Macro Scenarios. Haifa: Technion. Iannaccone, L. R. (1988). “A Formal Model of Church and Sect.” American Journal of Sociology 94 (Supplement): S241–268. Iannaccone, L. R. (1990). “Religious Practice: A Human Capital Approach.” Journal for the Scientific Study of Religion 29(3): 297–314. Iannaccone, L. R. (1998). “Introduction to the Economics of Religion.” Journal of Economic Literature 36: 1465–1496. Lehrer, E. L. and C. U. Chiswick (1993). “Religion as a Determinant of Marital Stability.” Demography 30(3): 385–404. Warner, R. S. (1993). “Work in Progress toward a New Paradigm for the Sociological Study of Religion in the United States.” American Journal of Sociology 98(5): 1044–1093. Warner, R. S. and J. G. Wittner, Eds. (1998). Gatherings in Diaspora: Religious Communities and the New Immigration. Philadelphia, Temple University Press.

2

First approach: The economics of American Judaism*,1

I. Introduction Despite many indications of increased vitality within the American Jewish Community, the attachment of many (if not most) of its members is so loose as to call into question their ability to transmit the fundamentals of Judaism from one generation to the next. According to the 1990 National Jewish Population Survey (NJPS), outmarriage rates among Jewish-born Americans have been increasing steadily throughout the twentieth century and reached 55 percent for the 1985–90 marital cohort.2 Although most of these outmarrieds retain their Jewish identity, few are expected to raise children capable or even desirous of carrying on the Jewish tradition. Moreover, many of the inmarried Jews in this cohort are at best marginal participants in the Jewish community and are likely to be weak transmitters of Jewish culture. Among those concerned with the long-run survival of American Jewry per se, there is an urgent need to understand better the underlying relationship between the Jewish community and its members.3 This paper analyzes that relationship from an economic perspective, focusing especially on implications of economic life of individuals for their Jewish participation. The perspective is necessarily broad, abstracting from cyclical income changes which despite their effects on Jewish spending and behavior are not so fundamental as to alter the basic life-style patterns of American Jews as a whole. The focus of this paper is on the economic environment of American Jews as it relates to their ability and willingness to participate in Jewish family and communal life. The methodology follows that of the recent literature on the economic history of institutions in general and religious institutions in particular.4 The maintained hypothesis is that changes which effectively reduce the cost of being Jewish will be more quickly adopted and integrated into the common pattern of American Jewish life. Similarly, the persistence of current practice in the mainstream will be adversely affected by rising costs, and changes using relatively scarce resources will be adopted (if at all) by smaller groups of more intensely committed adherents. This hypothesis is not one of economic determinism, explicit or implicit, but rather an * Reprinted with permission from Shofar 13:4 (Summer 1995), pp. 1–19.

First approach: the economics of American Judaism

13

acknowledgment that economic factors affect receptivity (or lack of it) within the Jewish community to maintaining traditions and to potential innovations. The origins of such innovations, presumably rooted in the spiritual and social life of the American Jewish community, are beyond the scope of this paper, as are the distinctively American forms in which they manifest themselves.5 Part II sets the stage with data on the economic experience of American Jews, analyzing trends in education and economic participation since World War II and in the intergenerational transmission of economic capabilities. Part III considers the effects of these trends on the cost of being Jewish, suggesting some ways in which changes in economic incentives have affected behavior and contributed to the development of distinctively American innovations in Jewish practice and institutions. Part IV summarizes some conclusions of the analysis with a view toward assessing the economic aspects of American Jewish survival.

II. How American Jews earn their living The work life of contemporary American Jews is quite different from that of their immigrant forebears or even the upwardly-mobile offspring of those immigrants. Thus it is helpful to begin with a look at data describing the broad trends in Jewish work experience.6 Because of differences in the availability of data, men and women are considered separately: Section A focuses on the major changes in occupational distribution among Jewish men, while Section B considers trends in labor force participation by Jewish women. Section C looks at changes in the education level of American Jews and discusses likely trends for the future.

A. Occupations of Jewish Men By the end of World War II, most American Jews had overcome the handicaps of poverty and were working in occupations clearly associated with middle-class living standards. As Table 2.1 indicates, about 60 percent of all adult Jewish men have been working in the “high-level” professional and managerial occupations throughout the postwar period, with another 12–15 percent in white-collar sales occupations. The occupational distribution of Jewish men has been remarkably stable in this respect throughout the second half of the twentieth century. In contrast, the blue-collar crafts and “other” occupations are of relatively little importance, having declined steadily (as older cohorts retire) from about 25 percent in 1948 to only 13 percent by 1990.7 Even more dramatically, Table 2.1 reflects an important shift in the composition of high-level occupations. Whereas in 1948 only 14 percent of adult Jewish men were professionals, this fraction increased steadily through the period to some 46 percent by 1990. Similarly, management (including business owners) accounted for 45 percent of the men in 1948 but had declined to only 16 percent by 1990.8 In 1948 just over half of the Jewish men in the professions were

14

Economics of American Judaism

Table 2.1 Occupation shifts over time: adult Jewish men Occupation group

c.1948

1957

1970

c.1980

1990

Professions Managerial Subtotal

13.8 44.9 58.7

20.3 35.1 55.4

27.2 26.5 53.7

43.0 26.4 69.4

45.8 16.1 61.9

Sales

12.0

14.1

19.7

13.2

15.6

Craft Other Subtotal

13.1 12.4 25.5

8.9 13.3 22.2

8.4 9.9 18.3

4.2 4.9 9.1

6.2 6.9 13.1

Clerical Not reported Subtotal

3.9 0.0

8.0 0.0

8.3 0.0

8.3 0.0

3.9

8.0

8.3

8.3

6.1 3.4 9.5

100.1

99.7

100.0

100.0

100.1

TOTAL

Sources: National Jewish Population Survey (1990) and B. Chiswick, “The Postwar Economy of American Jews” in A New Jewry? America Since the Second World War, P. Medding, ed. (Oxford, 1992).

concentrated in medicine, law, and higher education; with each cohort exhibiting greater professional diversity than the one before, by 1990 these occupations accounted for only 26 percent of all Jewish men in the professions. To some extent these trends in professionalization of the labor force reflect changes in the U.S. economy as a whole. Non-Jews as well as Jews have been entering the professions in unprecedented numbers, although by 1990 these occupations still only accounted for 15 percent of the non-Jewish men.9 Increasing diversity within the professions may also be characteristic of the labor force as a whole, since the fraction of non-Jewish professional men in medicine, law, and higher education declined from 22 percent in 1948 to 17 percent in 1990. In effect, differences between Jews and non-Jews in the diversity of professional fields, clearly apparent at the beginning of this period, have virtually disappeared for recent cohorts. Whether this has occurred because of the removal of barriers in education and elsewhere or because of intergenerational improvements in the economic status of Jewish students, it suggests an important change in the conditions under which Jewish men enter their occupational life. By the end of the twentieth century the “typical” American Jewish working man bears little resemblance to his forebears at the beginning of the century. He is a professional in some technical field, accepted in the secular world, and generally respected for his expertise without regard for his Jewishness. His earnings from this profession place him comfortably in the upper middle class, yet extreme wealth (such as might be generated by a successful business venture) is well beyond his expectations. His professional expertise is often the primary source of both material wealth and social status, and as such it is an underlying factor in his relationship with the American Jewish community.

First approach: the economics of American Judaism

15

B. Labor force participation of Jewish women Although comparable data on the occupations of Jewish women during this same period have yet to be constructed, these same trends have clearly affected their own experiences. The earlier cohorts of largely self-employed men in managerial occupations frequently depended on their wives to help in various aspects of the family’s business, perhaps part time or as temporary workers at a critical juncture or perhaps informally in the establishment of client networks in the community. As selfemployed managers accounted for fewer and fewer Jewish men, opportunities for Jewish women to work in a family business have undoubtedly declined as well.10 The broad outlines of this process are consistent with the labor force participation rates of adult Jewish women presented in Table 2.2. This table juxtaposes the labor force participation rates for two different groups: all Jewish women, among whom it is possible to differentiate by age, and currently-married Jewish women, among whom it is possible to differentiate by age of the children living with them (if any). Comparing changes over time in the work activities of these two groups is instructive. Labor force participation rates for young adult women (ages 18–24) are fairly high for the earlier years, although they have declined as education levels have risen over time. The effects of increasing college attendance may be somewhat obscured by underestimated participation rates for the earlier cohorts if women working intermittently in their husbands’ business were not reported accurately as unpaid family workers. Similar underreporting may exaggerate the dramatic increase among married women with young children (the oldest of whom is age 6), whose labor force participation rates rose from only 12 percent in 1957 to nearly 50 percent by 1990. Yet this increase is also consistent with the higher education levels, later age at marriage, lower fertility, and increased likelihood of salaried employment in a professional occupation that is observed among younger cohorts of American Jewish women. These same cohort changes may be seen in the remaining panels of Table 2.2. Participation rates for women in the “prime” working age groups (25–44) have been increasing steadily and consistently, and the rates for married women with school-age children (6–17) years have been remarkably similar to the rates for all women. Whereas only one out of four women in these categories was a labor force participant in 1957, fully three out of four were in 1990. Participation in the labor force may even increase as children leave home (especially important as a way of helping finance higher education), although the lower labor supply for earlier cohorts may be obscuring this effect among older women. By the end of the twentieth century, it is clear that the “typical” adult Jewish woman is a labor force participant, not as an unpaid family worker (since her husband is unlikely to own a small business) but as a salaried employee or the manager of her own business. Moreover, her work outside of the home is not contingent on marital status: married women with school-age children are just as likely as the average Jewish woman to participate in the labor force, and married women whose children are still in pre-school are as likely to work outside the home as not.

16

Economics of American Judaism

Table 2.2 Labor force participation of adult Jewish women Labor force participation rates

All Women: Ages 18–24 Married Women only: All children at home under age 6 All Women: Ages 25–34 Ages 35–44 Married Women only: All children at home ages 6–17 All Women: Ages 45–64 Ages 65 & over Married Women only: No children at home under age 18

1957

1970

c.1980

1990

57.2

58.5

54.5

39.9

11.8

25.1

25.5 33.5

39.7 48.8

28.6

49.2

38.2 8.5

53.3 19.7

30.0

55.4

49.4

66.1 68.6

75.9 74.8 75.6

60.0

65.6 26.2 50.9

Sources: National Jewish Population Survey (1990) and B. Chiswick, “The Postwar Economy of American Jews” in A New Jewry? America Since the Second World War, P. Medding, ed. (Oxford, 1992).

C. Education of Jewish Men and Women The structural shift in the male Jewish labor force towards professional occupations also has its counterpart among working Jewish women. This is evident from Table 2.3, which reports educational attainment of Jews-by-birth by gender and age group. Despite some gender differences in the older cohorts, it is clear that in recent decades most Jewish parents have been sending their daughters to college as well as their sons and have been encouraging both to acquire advanced degrees. Few gender differences in educational attainment are apparent for the youngest cohort reported (born in 1956–1960 and thus 30–34 years of age at the time of the survey in 1990), the main difference being whether post-college degrees are obtained at the Masters or Ph.D. levels.11 Among the “baby-boomers” born Jewish between 1946 and 1955, some 39 percent of the men and 37 percent of the women had earned post-college degrees by 1990 (i.e., by the age of 35–44). Even among those born a decade earlier, fully 34 percent of the men and 27 percent of the women held advanced degrees. In contrast, among those born before 1926 (who came of age before the end of World War II and were 65 and over by 1990) only 20 percent of the men and 9 percent of the women earned advanced degrees.12 The figures in Table 2.3 also suggest a marked intergenerational stability in education patterns. Among men born Jewish after 1925, over a third earned postbachelor’s degrees and about 20 percent continued their professional training to the highest level (Ph.D. or professional degree), a pattern which appears to be

First approach: the economics of American Judaism

17

Table 2.3 Education of adult American Jews: highest degree attained by age and sexa Age group

30 and over 65 and over 55–64 45–54 35–44 30–34

Men (percent distribution)

Women (percent distribution)

Ph.D./ Prof

Masters

College

High School

Ph.D./ Prof

Masters

College

High School

18 13 20 18 21 19

15 7 16 16 18 20

30 21 30 31 36 33

38 59 34 35 25 28

6 * * (5) 9 (8)

17 (6) 17 22 28 14

26 16 19 28 31 42

51 75 59 45 31 36

Notes a Persons with Vocational School or Associate degrees are included in the “High School” category. All Bachelor degrees are included in the “College” category. Persons with any Masters or R.N. degree have been included in the “Masters” category. The category “Ph.D./Prof ” includes persons with Ph.D., M.D., D.D.S., Law, and other advanced professional. * indicates cells with 10 or fewer cases. ( ) indicates cells with 11–20 cases.

fairly stable from cohort to cohort. Although the oldest cohort in Table 2.3 received much less schooling than their sons and daughters (or even than their younger siblings), this dramatic upgrading of Jewish education levels was effectively complete nearly half a century ago. For some decades the “typical” American Jewish youth has been expected to finish college and more than likely to earn an advanced degree as well.13 These education patterns suggest that the rapid upward socio-economic mobility of American Jews during the first half of the twentieth century has been succeeded by an era of continued improvement leading to stability at high levels of achievement. The majority of American Jews are now (and have been for decades) well-educated members of a comfortable middle class who routinely invest in the education of their children. Indeed, parental investment in the secular skills of their children, an inter vivos bequest of parental wealth which perpetuates the basis of their economic security, is now typically viewed as an important dimension of the American Jewish heritage.

III. The economics of Jewish time The increased importance of high-wage occupations among American Jews, both in absolute terms and relative to many of their non-Jewish neighbors, has altered the costs associated with many practices and observances in the American Jewish community. Since every consumption activity requires time as well as purchased goods and/or services, its “full price” must include the value of this time. This value is determined not only by the amount of time required but also by its opportunity cost (that is, the benefit foregone by not spending that time in its next best alternative), approximated by the wage rate.14

18

Economics of American Judaism

A consumption pattern is defined as relatively “time-intensive” or “goods-intensive” according to the importance of time relative to purchased goods and/or services. High wages, which raise the opportunity cost of time spent in non-work activities, make “time-intensive” consumption patterns more expensive relative to “goods-intensive” patterns. Just as each purchase of goods and services is selected because it is worth more than the next best alternative, each activity must be sufficiently satisfying (on some level) that it is worth more than the value of time spent in its next best use. Because people with high wage rates have a high opportunity cost at the margin for their time, they frequently perceive themselves as more time-constrained (having less “free” time) than their low-wage neighbors. A high value of time is characteristic of persons in professional and managerial occupations, and it has become the norm for American Jews during the post-World War II period. In effect, the Jewish community is composed of members who face strong economic incentives to reduce the time-intensity of consumption. This has many implications for the community, some of which are unrelated to Judaism per se and hence much the same as for non-Jews.15 Other implications relate to specifically Jewish observances and practices, which may be thought of as using “Jewish time” and “Jewish goods and services” to produce “Jewish experience.” For Jewish observance to be consistent with a high-wage time pattern, it must not only economize on time, it must also enhance the efficiency of that time for producing Jewish experience. The fundamental economic problem facing American Jewry has been to find forms of Jewish expression that effectively respond to this challenge. As individuals and families, American Jewish men, women, and children have adjusted to the high-wage education and occupational patterns (which are by now a stable feature of the community) not only by drastically reducing the amount of Jewish time in their lives but by adopting changes in Jewish ritual, custom, and religious observances that presumably enhance the Jewish experience obtained from the time they do spend. It is the hypothesis of this paper that these responses to economic incentives are crucial to an understanding of the American Jewish community, providing as well an important perspective on the uniqueness of American Judaism within world Jewry. The remainder of this discussion uses some important examples to illustrate these implications. These have been grouped under two headings: Section A focuses on the classic tradeoff between the quantity of Jewish time and its quality, and Section B discusses some “division of labor” strategies for enhancing the efficiency of Jewish time. A. Saving time and improving quality16 For most American couples, including Jews, the most time-intensive non-work activity for which a family must budget is childrearing (that is, parenting). Since each additional child substantially increases the demand on parents’ time, high wage rates (especially for women) make it costlier to have many children. Moreover, the extended education and investments associated with launching a

First approach: the economics of American Judaism

19

high-wage career raise the cost of starting a family at a young age, making it more efficient to establish career before family rather than the reverse. These incentives are consistent with later marriages, fewer children, and an extended period of financially independent adulthood, a pattern which Jews share with other high-wage American religious and ethnic groups. Parents with high earnings also have an incentive to compensate for smaller family size by spending more on each child (sometimes described as increasing child “quality”). Although such spending can take many forms, Jewish couples tend to emphasize investments in their children’s human capital, especially education and health.17 In the long run, this effectively transmits the parents’ high earning capacity to their offspring, resulting in the observed intergenerational transmission of Jewish occupational patterns. In the meantime, the parents’ focus on educational investment reinforces the view that their children’s time is also valuable; indeed, typical time allocation patterns observed among American Jewish families suggest that parents may value their children’s time at a rate which matches their own. Analogous quantity-quality tradeoffs are evident in American Jewish patterns of observance and non-observance. Traditional Jewish practices which are rooted in a time-intensive family lifestyle (Shabbat observance, kitchen kashrut, many home-based holiday traditions) are either ignored or observed in drastically abbreviated form.18 Other time-intensive traditions (synagogue attendance, for example, or even daily prayer at home) can rarely compete with alternative uses of scarce family and leisure time in high-wage households. Particularly vulnerable are traditions whose timing is asynchronous with secular schedules (Shabbat and holidays that begin at sunset, non-working holidays at the beginning of a school year). Contemporary American Jews generally avoid time-intensive practices much more than did their low-wage forebears (and low-wage Jewish counterparts). Many even express their behavior in economic terms, being willing to provide financial support to the community even though (or perhaps because) they “haven’t got” or “can’t afford” the time to participate. Others seek more philosophical forms of expression: they deemphasize, ignore, or even deny the importance of those practices which are especially time-consuming, preferring instead to focus their Jewish identification on the ethical and social strictures that permeate all life experiences and make few (if any) extra time demands.19 Despite the many ways in which Americans have reduced Jewish time demands in their lives, their desire for higher “quality” Jewish time is responsible for much of the dynamism of American Jewish intellectual and communal life. Indeed, the Conservative, Reform, and Reconstructionist movements in America may be understood as strategies for raising the quality of Jewish experience in a scarcetime environment. Although each movement has its own distinctive features, these tend to reflect different preferences with regard to the quality of Jewish experience rather than differences in basic approach: they all fundamentally accept the notion that Jewish observance and communal life must be adapted in order to compete for time with secular alternatives. These movements, which by

20

Economics of American Judaism

1990 accounted for some 85 percent of all American Jews, all attempt to be compatible with the current structure of economic incentives while preserving the fundamental elements of Jewish religious tradition. In so doing, they have become so deeply entrenched as to effectively define the American Jewish identity.20 Although most observers acknowledge the time-saving practices shared by virtually all American synagogues, obvious quality-enhancing practices tend to be taken for granted: the availability of English translations for Hebrew readings, modern English as well as Hebrew in parts of the liturgy, sermons that emphasize “relevance” to contemporary American life, even the dependence on a professional rabbinate. More subtle, perhaps, is that synagogue attendance in America has become an activity in which families participate as a unit. Family seating (that is, without separation of men and women) has long been the American norm, and the presence of children frequently provides the impetus for joining a synagogue and attending services. Recent egalitarian adaptations of liturgy (as, for example, naming the matriarchs along with the patriarchs) reflect not only the active presence of females in the congregation but also a shift in the locus of Jewish family life from home to synagogue. A family orientation within the synagogue, and a synagogue orientation for Jewish family life, enhances the mutual complementarity of Jewish time in both spheres. As such, it is an effective strategy for increasing the quality of Jewish time in a high-wage community. B. Division of labor by gender and age Whenever people live together and pursue a common goal, various schemes for a division of labor can be used to raise productivity. Such gains need not imply competence of either group in any absolute sense, but only relative efficiency with respect to each other. Nor need this relative efficiency be based on inherent characteristics, since differences can arise even among equally able individuals once they agree to specialize in different activities. Within both family and community, a variety of Jewish traditions and practices may be viewed as efficiency-augmenting divisions of labor by gender and age. These divisions often seem “natural” in part because of inherent differences related to the life cycle, but their appeal is in large part also related to the fact that wage rates (and other aspects of economic roles) generally differ by gender and age. Thus the particular form which is efficient will vary across time and space with economic circumstances, and analysis of relative time values can contribute to understanding both stability and change in the gender and age patterns of Jewish life. American Jewish Gender Roles. Most American Jewish immigrants came from the impoverished shtetls of Eastern Europe, where Jewish men faced very restricted labor market opportunities and many families depended on informal markets where women were active participants. The Jewish practices of this community were consistent with low wage rates for men, being focused on relatively time-intensive, male-dominated synagogue, study, and communal

First approach: the economics of American Judaism

21

activities. Women’s Jewish obligations centered on the home and family and were more flexible with regard to time. In America, Jewish immigrants found themselves facing much more favorable earnings opportunities, especially for men, which undermined attempts to replicate on American soil a “traditional” division of labor.21 As Jewish men embarked in large numbers on increasingly more demanding secular occupations, they reduced their participation in time-consuming Jewish activities: not only from the ritual of the synagogue and daily prayer but also from dominant roles in communal life and Jewish education. Women replaced men in many roles, from fundraising to social work to teaching in Jewish schools. Behaving as true partners in support of their husbands’ specialization in the labor market, they filled what would otherwise have become a vacuum in the Jewish community. Whether as volunteer workers or as professional staff, women became far more numerous than men in most (traditionally male) areas of Jewish education and social service. By the late twentieth century, however, the relative wage equality between men and women has effectively undermined the economic basis for a clear gender division of labor in Jewish family and communal life. With many attractive opportunities in the secular spheres of work and leisure, homemaking is no longer the occupation of choice for most Jewish women. Educational and career expectations are virtually the same for sons and daughters, and the Jewish community has many role models for high-achieving women as well as men. Moreover, the content of higher education associated with professional occupations tends to support an understanding of intellectual and creative ability as an individual characteristic rather than one which is group- or gender-based. Thus the notion of gender difference in the benefit of studying Torah, for example, or in the ability to express spirituality through prayer, is highly dissonant and finds little support among American Jews, whether men or women. Although popularly associated with the emancipation of women from passive Jewish stereotypes, the wide grass-roots support for egalitarianism in Jewish ritual and its rapid acceptance throughout the American Jewish community are clearly related to the narrowing education and wage gaps between men and women. If the time cost of synagogue attendance is nearly the same for each family member, the benefit (quality of Jewish experience) must also be similar for everyone. Efficiencies are also introduced by innovations that enhance complementarity between Jewish family and synagogue time. Rather than shifting the locus of responsibility for Jewish cultural survival from men to women, today’s economic incentives induce Jewish couples to share these responsibilities more equally in much the same way that they induce two-career couples to share their time-intensive parenting activities. This is not to say that Judaism cannot, or should not, have a division of labor based on gender, but rather that to be efficient any such division must be compatible with approximately equal value of time and equal potential for achievement. For the most part, gender equality is an efficient response to the value of time for American Jews, men as well as women, and as such it has gained wide acceptance in the

22

Economics of American Judaism

mainstream of American Jewry. There it is likely to remain as long as wage structures in the Jewish community continue in their current pattern. American Jewish Life Cycle. Like gender, age also serves as the basis for a division of labor in Jewish life. Even in activities where everyone participates together, the roles of children, parents, and grandparents are typically differentiated. Each cohort participates in its own way up to the point where the benefit no longer exceeds the cost; an efficient division of labor provides each with an ageappropriate role to enhance the benefit of joint participation. In any era of economic stability, whether the poverty of the shtetl or the prosperity of suburbia, life-cycle variations in the value of time permit a division of labor which can enhance the quality of Jewish experience for each age cohort as well as for the interconnected whole. Among American Jews, the first half of the twentieth century was an era of transition between two such periods, a time in which each cohort faced successively better economic opportunities (higher wage rates) than the one before. During this period of rapid upward economic mobility, the division of Jewish labor which emerged allowed younger adult cohorts to specialize in highlevel secular market activities (including education) while their parents focused more on the time-intensive activities of Jewish family and communal life. Older fathers, orthodox by training if not by predilection, maintained ritual needs of family and community to the best of their ability and thus helped their sons to focus on secular achievement. Older mothers, frequently full-time homemakers familiar with kashrut and other Jewish home-based traditions, made life easier for their working daughters by continuing to prepare the festive meals for the extended family and hosting its holiday gatherings. The dramatic secular success of second- and third-generation American Jewish immigrants, and the consolidation of economic security within Jewish families and in the community as a whole, was undoubtedly facilitated by this generational division of labor. Yet it implied the development of an especially passive mode of Judaism for many second- or third-generation adults, accepting and even reinforcing new Jewish roles which made few demands on the time and energy of virtually an entire cohort of American Jews. Going well beyond mere toleration of non-observance, it supported a Jewish lifestyle with extremely low levels of adult participation in both quantity and quality dimensions. This age-based division of labor, and the passive Judaism which it supported, may include among its long-run consequences the marginalization of some traditional Jewish identifiers. Although such identifiers have for centuries, and in all countries, included kashrut, Shabbat, daily prayer, and synagogue ritual, for example, most American Jews not only ignore these practices but believe them to be peripheral (if not alien) to the essence of their Judaism. To the extent that these practices tend to be time-intensive and hence costly, an increase in non-observance during prosperous times can be expected and indeed has many precedents, both historical and contemporary. Their removal as Jewish identifiers, however, may have occurred in part because of the passivity encouraged by an unusually extreme generational division of labor.

First approach: the economics of American Judaism

23

Precisely because of its efficiency during what was otherwise a very disorienting period of rapid economic transition, the generational division of labor permeated virtually all aspects of American Jewish life. By now, however, Jewish economic life has stabilized, and differences between age cohorts in education and secular opportunities are fairly small. As a result, old Jewish customs compatible with intergenerational stability have more appeal. There are also signs that American Jewry may be returning to an acceptance of some of the traditions mentioned above as central, although successful revival is likely to involve time-saving and quality-enhancing modifications in the way they are implemented. The life-cycle patterns of American Jews also differ from the past in ways that suggest economic incentives for new Jewish responses. In particular, the emergence of two “new” age groups (older seniors and young singles) as numerically and socially important is placing pressure for change on roles within the Jewish community. Adult singles, a group composed primarily of financially independent men and women who establish secular careers before being ready to establish a new family, constitute a substantial untapped resource potentially available to the Jewish community. Since high levels of education and other career-related investments are typically associated with delayed age of marriage and childbearing, this group is unprecedentedly large among American Jews: by 1990 never-married singles accounted for a full 53 percent of all born-Jewish adults 25 to 29 years old. Yet Jewish roles for persons in this age group, whether in synagogue or family, tend to be child-oriented and hence less satisfying (or even inappropriate) for the unmarried. Organized activities for Jewish singles tend to be secular, focusing on social or career-related events, perhaps reflecting an expectation of Jewishly passive roles that are no longer viable. The instability of this situation is manifest in two ways: by dissatisfaction among singles regarding the quality of opportunities for participation in Jewish family and communal life and (not unrelated) by extremely high rates of non-participation and outmarriage in this group.

IV. Conclusion The fundamental economic problem for American Jewry has been to find forms of Jewish expression that are compatible with the contemporary structure of prices and incomes. As the value of time has risen for men, women, and children as individuals, many Jewish customs and observances which are especially time-intensive have become increasingly costly to maintain. These, along with Jewish traditions rooted in an economically obsolete division of labor by gender and age, account for many of the observances at risk of disappearing entirely from American Jewish life. American Jews have generally shown themselves to be highly responsive in the secular sphere, and in many areas of Jewish life as well, to changes in their incentive structure. Hence the distinctively American willingness, even eagerness, to innovate in areas of Jewish ritual, custom, and religious observance. Many adaptations of American Jewry to its contemporary economic reality are expressed within the institutions of non-Orthodox synagogue movements,

24

Economics of American Judaism

primarily Conservative and Reform. Although the long-run success of these institutions for transmitting Jewish continuity may still be open to question, the degree of their entrenchment in American Judaism is not. The economic analysis developed above also provides a perspective for understanding the distinctiveness of American Jewry among the various communities of the diaspora. In most other countries, for example, Jews seem to be much less receptive to the non-Orthodox synagogue movements, preferring a system of orthodox tradition in which nonobservance (even abstinence) is the primary method of saving Jewish time. To the extent that this is due to differences in economic incentives, the spread of non-Orthodox movements to other diaspora communities would follow if (or as) the structure of earnings approaches that of American Jewry. Similarly, if at the moment gender egalitarianism is evident as a grass-roots movement only among American Jews, it may become more common elsewhere if (or as) opportunities for women in secular spheres in these countries become more attractive.

Notes 1 The author is indebted to many people for comments on earlier drafts of this work, including Howard Adelman, Barry Chiswick, Alice Goldstein, Evelyn Lehrer, and Michael Shapiro. Helpful comments were also received from participants in the 1993 meeting of the Midwest Jewish Studies Association and the 1995 meeting of the American Economics Association. The current paper benefits from their suggestions but remains the sole responsibility of the author. 2 This rate is for first marriages only (Carmel U. Chiswick, “Determinants of Religious Intermarriage: Are Jews Really Different?” Papers in Jewish Demography 1993, pp. 247–257). Earlier studies have found intermarriage rates to be generally higher for later marriages (B. A. Kosmin, N. Lerer, and E. Mayer, Intermarriage, Divorce, and Remarriage Among American Jews 1982–87 (North American Jewish Data Bank: Family Research Series, No. 1, August 1989). 3 The term “community” is used broadly to refer to American Jews in general and their distinctively Jewish institutions. This is conceptually distinct from, and should not be confused with, local-level groupings based on particular geographical areas, synagogue associations, or other common interest criteria. Although economic issues clearly affect the survival of these subgroups in various ways, an analysis of these relationships is beyond the scope of this paper. 4 Douglas North, “Economic Performance Through Time,” American Economic Review 84 (1994), pp. 359–368, and Laurence R. Iannaccone, “Sacrifice and Stigma: Reducing Free-riding in Cults, Communes and Other Collectives,” Journal of Political Economy 100 (1989), pp. 271–91. 5 See R. Stephen Warner, “Work in Progress toward a New Paradigm for the Sociological Study of Religion in the United States,” American Journal of Sociology 98 (1993), pp. 1044–1093, for an excellent survey of recent research on the distinctive characteristics of religious institutions in America. 6 Much of the data in this section is from B. Chiswick, “The Postwar Economy of American Jews,” in P. Medding, ed., A New Jewry: America Since the Second World War (Oxford, 1992). 7 By way of comparison, during this same period the fraction of non-Jewish men in high-level occupations ranged from 23 percent to 25 percent, less than half of the lowest figure in Table 1 for Jewish men.

First approach: the economics of American Judaism

25

8 Although Jewish men are still disproportionately represented among the self-employed, it should be noted that self-employed professionals (including doctors, lawyers, accountants, consultants) would be included in professional rather than management occupations. 9 Despite this occupational concentration, Jews are a tiny minority in the U.S. labor force and hence only a small fraction of workers in the professions. 10 Although self-employment still accounted for 35 percent of adult Jewish men in 1990, many of these men are in professional practices where the use of part-time family labor is rare. 11 These figures are based on educational attainments as of 1990 without regard to the timing of school attendance. Since adult women are more likely than men to interrupt schooling, some of the observed gender difference in this cohort may reflect incomplete rather than reduced attainment levels for women. 12 This education pattern is not typical of Americans in general. Among all non-Jewish adults in 1990 only 25 percent of the men and 19 percent of the women had ever earned a college degree (see Barry R. Chiswick, “The Postwar Economy of American Jews,” in P. Medding, ed., A New Jewry? America Since the Second World War Studies in Contemporary Jewry 8 [1992], pp. 85–101). The comparable figures for Jewish adults are 71 percent of the men and 57 percent of the women. 13 This pattern is less obvious for women, whose higher education has lagged behind that of their brothers by a decade or two. Even so, in younger cohorts of Jewish women the proportion with post-college degrees seems to have stabilized at about one-third. 14 Although wage rates measure the additional earnings obtainable if the time were spent at work, they also proxy for the value of time spent in each of its other alternative uses. This is because whenever there are higher-valued alternatives at the margin, people will reallocate time until all such gains have been exhausted. 15 There is some evidence, however, that Jews as a group tend to be more sensitive to economic incentives than the average American with similar characteristics (Barry R. Chiswick, “The Labor Market Status of American Jews: Patterns and Determinants,” 1985 American Jewish Yearbook, pp. 131–153). 16 Inferences about the economic effects of high wages on family decisions are drawn from a substantial literature on the subject, including the economics of marriage and divorce, fertility, health, education, and consumption. Based on seminal works by T. W. Schultz (Economics of the Family: Marriage, Children, and Human Capital, ed. T. W. Schultz [U. of Chicago Press, 1975]) and Gary Becker (“An Economic Analysis of Fertility,” in Demographic and Economic Change in Developed Countries, a conference of the Universities-National Bureau Committee for Economic Research [Princeton: NBER, 1960], and Treatise on the Family [Cambridge: Harvard University Press, 1981]), this literature includes extensive empirical evidence confirming both the validity of the analysis and its robustness over many populations. The present discussion applies these basic findings to the characteristics of American Jews. 17 Although economic incentives lead parents to purchase more child quality, the content of that purchase may vary; an emphasis on education is neither unique to Jews nor universal among high-wage groups. Some such groups, for example, tend to place a greater value on a diploma from the “best” colleges than on the education actually obtained by their children. Others place more emphasis on opportunities for their children to have “fun,” to lead a fashionable lifestyle, or to carry on a family business. 18 The time-intensity of kashrut derives not so much from the practice itself as from the need to prepare food at home, for a high value of time increases the incentive to eat in restaurants. This incentive can be so strong that many Jews who observe strict kashrut at home are nevertheless willing to eat in non-kosher restaurants. 19 While this secular brand of Judaism may be consistent with certain modernist philosophies, there is not much evidence that its prevalence among American Jews is attributable to the content of higher education. Since education leads to higher wage

26

Economics of American Judaism

rates and raises the cost of time, there is a strong economic incentive for the highly educated to identify with Judaism in this manner simply because the alternatives are more expensive for them. 20 According to the 1990 NJPS, some 45 percent and 39 percent of those born Jewish are self-identified with the Conservative and Reform movements, respectively. In contrast, only 7 percent of American Jews-by-birth identify themselves with the various Orthodox movements, and fully 38 percent of these are age 65 or older. Another 6 percent identify themselves as “secular” Jews or without denomination. 21 The term “traditional” is used here in a limited sense. Jewish history varies with respect to its traditions, and there are numerous precedents for a shift of the locus of Jewish observance from the male-dominated synagogue into the female-dominated Jewish home. Indeed, the very survival of Judaism during such periods is often attributed to the preservation by women of the customs and traditions of Jewish family life.

3

A retrospective: The economics of American Judaism*

Most American Jews today are the descendents of immigrants who arrived about a century ago, especially during the decades between 1880 and 1920. They came from Tzarist Russia and the countries of Eastern Europe, politically repressive and anti-Semitic societies with little religious freedom for Jews. While the United States and much of Western Europe were experiencing rapid industrialization and economic modernization, the countries where Jews lived were still characterized by intense poverty and the virtual absence of economic opportunity. Russian Jews were also subject to religious persecution that took the form of severe crowding and restrictions on economic activity, with the result that their standard of living was among the poorest in a poor country. Even in the less repressive countries, when Jews moved to the cities their economic advancement was often blocked by anti-Semitism or even legal restrictions on Jews. The journey to America was both difficult and costly, but it was an investment in the future for the Jewish immigrants and their children. The United States at the turn of the twentieth century was arguably the most technologically advanced and fastest growing economy in the world. New York, the most common port of entry for Jewish immigrants, led the country in both respects. Although antiSemitism was present, it was not nearly as prohibitive as in Europe and Jews could move up the socioeconomic ladder. The American economy was large enough for the Jews to be absorbed without difficulty; it was vigorous enough for them to find prosperity; and it was sufficiently open for them to unleash their latent creativity and in turn make some important contributions to economic development. As both producers and consumers, American Jews transformed themselves from penniless, tenement-dwelling immigrants to upper-middle-class suburbanites in no more than three generations, and often less. This is the dominant economic story of twentieth-century American Jewry. It is a story that includes not only occupational mobility but also linguistic change, changes in consumption patterns and family life, and changes in Jewish communal structures and religious practice. These changes were achieved in part by purposeful design and * Reprinted with permission from The Cambridge Companion to American Judaism (Dana E. Kaplan, ed.). Cambridge University Press, 2005, pp. 317–327.

28

Economics of American Judaism

creative response to new opportunities and in part by trial and error. While the entry of Jews into the suburban middle class was already evident by the 1950s, economic adjustment in other dimensions of Jewish life would continue throughout the rest of the century.

Immigration In recent decades, economists have given much attention to the adjustment of immigrants with respect to employment and earnings.1 The decision to move from one country to another is viewed as an investment with a life-long time horizon, for which the rate of return is determined by comparing benefits – usually an increase in earnings – with the cost of moving and adjusting to the new country. New immigrants might not realize these benefits immediately on arrival if their skills are not readily transferable to the new country. The most important of these skills is language (English fluency), but immigrants may also be unfamiliar with consumption patterns (how to shop efficiently for goods and services), with residential patterns (how to find affordable housing in a good neighborhood), with labor markets (how to find a good job), with workplace culture (how to get along with employers and co-workers), and with job skills that differ between the two countries. Like other immigrants who came to America from impoverished European populations, Jews could not fully realize their economic expectations without investing in human capital appropriate to production and consumption in their new country. These investments, popularly labeled “Americanization,” had a very high rate of return and were undertaken with enthusiasm by Jewish immigrants. Night-school English classes, settlement houses, and Jewish immigrant-aid societies prepared the immigrants to move on from their low-paying jobs in sweatshops and pushcarts. As they learned the ways of their new country, they found better earning opportunities, whether wage work or self-employment, and evolved into an upwardly mobile ethnic community. Most of these opportunities required more investments to acquire occupational skills or to build a business. The economy was growing, however, and rates of return to learning English and to skills relevant to the American economy were high. Those immigrants who invested heavily were typically rewarded with improved incomes and higher consumption levels. While all immigrants faced these same incentive structures, Jews seem to have invested more heavily in American forms of human capital than most non-Jewish immigrant groups.2 Part of the reason may be that they knew from the outset that they would remain in the United States, so they had a high stake in learning English and other America-specific skills, in contrast to some other immigrant groups whose goal was to return to the origin country with enough money to improve their standard of living there. Part of the reason may be that Jews arrived with more human capital than other immigrants – they were more literate in nonEnglish languages, were often comfortable in a multilingual environment, had experience with urban life and self-employment, had a variety of self-help

A retrospective: the economics of American Judaism

29

traditions associated with minority status, and were familiar with study from their religious training in the old country. Part of the reason may also have been that they were more enthusiastic about participating in the American Dream, quicker than other groups to jettison their old-country traditions in favor of the new. There is also some evidence that Jews may have been more attuned to market signals and better able to interpret their implications for the future.3 Whatever the reason, it seems clear that Jews faced higher rates of return to investments in human capital than most other groups, both immigrant and native, and they acted accordingly.

Occupational mobility Although Russian and East European Jewish immigrants may have come with better skills than other immigrants arriving during this period from Eastern and Southern Europe, they were unskilled by American standards and this affected their immediate opportunities for work. At first, they typically found housing and jobs within the Jewish immigrant enclave, a community where they could be understood in Yiddish, find kosher foods, and participate in familiar religious observance with other Jews from the old country. The most common employer of recently arrived immigrant Jews was the garment industry and its ancillary occupations. Although hours were long and wages were low, these jobs allowed immigrant men, women, and children to support themselves during their early years in a new country. As Jewish immigrants learned their way around, they moved upward into better jobs and invested in their own businesses. Many Jewish entrepreneurs remained within the garment industry, taking a leading role in its transformation into the production of upscale ready-made clothes.4 Others moved from pushcart peddling to shopkeeping to department store ownership. Some established the modern kosher food industry, while others nurtured the new motion picture industry. The common pattern was finding a niche in the growing American economy, and then applying creativity, entrepreneurship, and hard work to move into the middle class. Although Jewish women and children worked during the early years of sweatshops and low wages, their role as income earners declined precipitously as men moved into better-paying occupations.5 Young women typically worked both before and after marriage, but they withdrew from the labor force during childbearing years. The wife of a storekeeper might work beside him in the business, while wives in other industries might contribute informally as secretary, accountant, or sales representative. During the child-rearing years, however, most Jewish women worked primarily at homemaking and only secondarily as “unpaid family labor” in their husbands’ businesses. Jewish children – both boys and girls – were removed from the sweat shops and sent to school as soon as the immigrant family could forgo their wages. The immigrants understood the American public school as a good investment in human capital: any sacrifice in present income would pay off in terms of better future earning opportunities for their children. Jewish parents were especially

30

Economics of American Judaism

desirous that their children acquire white-collar skills and were willing to support their schooling accordingly. As the Jews left poor immigrant neighborhoods in search of better living conditions, the quality of public schools would be an important criterion for them in choosing a new location. Most children of Jewish immigrants were able to complete high school; many continued through college or professional school, and a significant fraction earned professional degrees. The speed with which American Jewry moved up the occupational ladder was impressive. In 1910, over three-fourths or 75 percent of the Jewish men still worked in crafts and other blue-collar occupations, while only 6 percent were owners or managers and less than 4 percent were professionals. By 1950 – a mere forty years later – there were 26 percent in management and 8 percent in the professions, for a total of 34 percent or over one-third in these high-level whitecollar occupations. The next generation stayed in school even longer and was even less likely to enter a business. By 1990, nearly two out of three American Jewish men were in high-level occupations: nearly 50 percent were professionals and about 17 percent were in management.6 Jewish immigrants and their children invested in the education of their daughters as well as their sons. Although the daughters of Jewish immigrants did not attend college and professional school at the same rate as their brothers, they were more likely to do so than U.S.-born women and the women in other immigrant groups at the same income level. As Jewish men became doctors, lawyers, and college professors, Jewish women became public school teachers, social workers, and administrators in Jewish communal organizations. By the third generation in America, Jewish women were nearly as well educated as Jewish men, a substantial proportion had professional careers, and two-career couples had become the norm for young Jewish families. Investments by American Jews in occupation-related education were accompanied by other human capital investments in a package that dramatically affected Jewish lifestyles. Investments in health by Jewish immigrants included an early concern with modern standards of good nutrition, hygiene, and sanitation as well as access to high-quality medical care, and these investments increased over time with rising income. The immigrants learned to enjoy American music and art, theater and literature, and they became sophisticated consumers of modern culture. They purposely chose to have small families so they would be able to afford heavy investments for their children in all these dimensions. There would be a “baby boom” in mid-century when Jews, like most other Americans, had more children than usual, but this was a temporary phenomenon in a population for which the two-child family was typical. The Jewish fertility rate is generally lower than that of non-Jews in the population and is currently below replacement (the 2.1 children per woman needed to maintain the Jewish population at its current size).7

Jewish human capital The emphasis on Americanization tended to crowd out more traditional forms of Jewish human capital investment. Torah study was not a high priority, and few

A retrospective: the economics of American Judaism

31

American children learned enough Hebrew to engage in it with any sophistication. This may have been because the more religiously inclined were less likely to leave Eastern Europe, making the immigrants to America a selfselected group that was not especially interested in religious matters. However, even for those concerned with the Jewish education of their children, the rewards to Americanization were so great, and the process so all-consuming, that investments in Jewish religious skills seemed like a costly diversion of time and other resources. It was much easier to take religious skills for granted, adapting Jewish observance to an American version that merged with family life and conflating it with nostalgia for a romanticized version of the old country.8 The development in America of many distinctive Jewish customs and rituals was accompanied by a marked decline in Jewish religious sophistication. As is typical of immigrant religious groups, synagogues in immigrant neighborhoods were small (often storefront) establishments where language and practice replicated the old-country experience.9 At a time when immigrants were still struggling to learn the ways of their new country, the synagogue was a haven of familiarity where old-country human capital could still have value. However, the investment priorities of American Jews lay elsewhere as they struggled toward economic security and upward mobility. Religious life was relatively neglected, synagogue attendance was low except on major holidays, and the Jewish education of American children was minimal. Instead, many of the immigrants turned to such secular activities as theater, political or labor organizations, and occupation-related social life to express their Jewish identity in America. As Jews acquired their American skills and found occupational niches in the American economy, they left the crowded immigrant neighborhoods for better housing and, importantly, good public schools for their children. Religious observance in the old country had been very time intensive, perhaps reflecting the low wages and poor economic opportunity of Jews in Russia and Eastern Europe. These practices became more and more costly with higher wages, and people responded by spending less time in the synagogue and especially in religious study. The storefront synagogue was left behind, to be replaced by a synagogue that was more American in its style of observance. What was most important was that the new synagogue practices reduced the time intensity of Jewish observance not only by shortening services but also by relying more heavily on the professional rabbinate and by substituting English for Hebrew, both of which greatly reduced the amount of prior study required for full participation. The popularity of Reform and Conservative synagogue movements among upwardly mobile immigrants and especially their American-born children was thus a direct consequence of economic success.10 Despite their reduced observance of Jewish ritual, most immigrants were not rejecting Judaism itself and expected to educate their children as Jews. Jewish schools were established and attendance was widespread, but typically only for a few years before the Bar Mitzvah and even then for far fewer hours than the “regular” schools.11 Whether the Jews of that generation underestimated the challenges of American pluralism or were simply responding to a high potential

32

Economics of American Judaism

for upward economic mobility, education in American (i.e., secular) subjects clearly dominated Jewish subjects in the competition for study time. By the second half of the twentieth century, most American Jews were living comfortably in middle-class suburbs, beyond the struggles of their immigrant parents and grandparents. Jewish families were typically small, and secular education was seen as the basis of both personal fulfillment and economic security. Jewish residential choices emphasized communities with high-quality public schools and good medical facilities. Jewish parents strove to send their sons and daughters to college, preferably to institutions with high academic standards. Jewish education in the suburbs was facing a new set of challenges. Jewish children still attended after-school programs, but their home environments reflected the low Jewish education of their parents. Most adult children of immigrants had received only a perfunctory Jewish education and many viewed religion itself as an anachronistic old-country phenomenon. Despite their earlier reputation for secularism and irreligiousity, the grandparents whose youth had been spent in the old country or in immigrant neighborhoods where old-country customs prevailed became virtual repositories of Jewish tradition in the affluent suburbs. It was they who maintained ritual in the synagogues and in the home, while their adult children either scoffed or accepted passive religious roles in keeping with their low level of Jewish skills. Judaism in such families became associated with the elderly, and the nostalgia associated with many holiday traditions did little to counter this impression. The grandchildren of immigrants, as the first generation that was native to suburban Jewish communities, typically reached adulthood with very high levels of secular human capital and very low levels of Jewish human capital. This meant that time spent in secular pursuits would be very productive – an implication born out by the high wage rate commanded by high skills – while time spent in religious activities would have very low productivity. For example, a man virtually illiterate in Hebrew and unfamiliar with the rhythms and ritual of the Shabbat synagogue service might find the experience more irritating than comfortable, generating a sense of low achievement utterly foreign to his weekday experience in a professional or social setting. In such a situation, synagogue attendance would be perceived as a “waste” of time, and perhaps also Jewish observance in general. From an economic perspective, a large imbalance in the level of different kinds of human capital – in this case secular and religious – is inherently unstable. It gives an incentive either to align the two types of skill more closely by investing in Jewish knowledge or to reduce drastically the time spent on Jewish observance. The former incentive stimulated a revival of interest in Jewish learning and a creative Jewish Renaissance that began in the later decades of the twentieth century and continues today. The latter incentive underlies the somewhat larger concurrent trend toward assimilation of many American Jews and the consequent rapid rise in the rate of outmarriage. From an economic perspective, the paradoxical combination of “apathy and renewal” observed in the later decades of the twentieth century is an unintended consequence of the very same economic

A retrospective: the economics of American Judaism

33

decisions responsible for the dramatic upward mobility of Jewish immigrants and their children earlier in the century.12

Jewish community and philanthropy Together with their strong emphasis on individualism and upward mobility, American Jews were very successful at establishing communal organizations to facilitate their progress and share their wealth with the less fortunate. Like the religious institutions, self-help organizations in the immigrant community were largely imported from the old country where Jews had to depend on themselves for communal institutions. In addition to the familiar methods of charity to care for widows, orphans, and the truly indigent, they set up a variety of other institutions such as burial societies and mechanisms for the certification of kashrut (dietary laws) in factories and restaurants. Of major importance were the Hebrew Free Loan Societies that made many small short-term loans, often with no interest.13 As Jews moved up the socioeconomic ladder, these institutions became organized along American lines and acquired a professional staff of their own.14 The much better opportunities for men in the American marketplace meant that women filled many positions in Jewish organizations, including jobs in Jewish education and in the administration of synagogues and charities, that were previously held exclusively by men. This brought women into new roles in Jewish communal life that eventually came to rely on them as social workers and middle-level administrators, as volunteers at first but later as paid employees. American Jews were greatly affected by – and responsive to – major events in the Jewish world outside the United States. The immigrant community sent remittances to family remaining in the old country, encouraging them to immigrate by sending payment of passage and arranging for lodging and jobs in America. Organizations were formed to help new immigrants with their adjustment on arrival, the best known of which was the Hebrew Immigrant Aid Society (HIAS). American Jewry’s concern with anti-Semitism led to political activities and support for the fledgling Zionist movement to establish a Jewish homeland in British Palestine. Although Jews shared with other Americans alarm at the rise of Nazism in Germany and the events that were to culminate in World War II, their concern was intensely personal since the families they left behind had been singled out for destruction. They contributed substantial sums to refugee relief and later to the support of displaced persons. They also contributed generously to the State of Israel, both before and after it became independent, providing money to resettle people from Jewish communities at risk, to provide social services, to purchase and develop land, to improve public health facilities, and to build and maintain modern medical and educational institutions. The financial and political support of American Jewry complemented the hard work of Israeli Jewry to establish Israel as an important center of Jewish life. The funding of these large tasks was itself a major undertaking. At a time when Jews were preoccupied with Americanization and the vicissitudes of upward mobility, they were far more willing to be generous with money than with time.

34

Economics of American Judaism

This was the strength of umbrella organizations (such as the United Jewish Appeal) that raised funds to be distributed among many recipients. Apart from streamlining the fundraising process, thus keeping administrative costs relatively low, these organizations made decisions about how to distribute funds. They enabled individual Jews to give money to general causes, such as “the poor,” “refugee relief,” or “Israel,” without themselves having to invest in expertise on the worthiness of individual recipients or causes. This was especially important for overseas causes, where information would have been difficult to develop, but it was also useful in local communities where the needy might not be well known to the potential donors or where confidentiality might be an important concern. The success of American Jewish fundraising activities, especially during the second half of the twentieth century, is legendary. The umbrella organizations functioned optimally when the causes were clear and when there was consensus among donors and administrators on fundamental criteria for evaluating the worthiness of recipients. This consensus has been breaking down in recent decades with increased diversity in the interests of American Jews. They are more secure in their socioeconomic situation, better integrated into American society, and better informed about many of the recipient organizations. With the acceptance of Jews into the American mainstream, local Jewish organizations have had to compete for funds with non-Jewish causes, as in the arts or in medical research, which Jews also feel a responsibility to support. The cost of acquiring information about Jewish recipients abroad has declined dramatically, whether in Israel or in other Jewish communities such as the former Soviet Union, in part because of new information technology and in part because foreign charitable organizations have learned to advertise directly in the American market. As a consequence, American Jewish philanthropy has been experiencing a shift away from the major federation fundraising campaigns toward non-Jewish charities and toward direct giving to selected Jewish organizations.15

Conclusion The story of American Jewry in the twentieth century is the story of an immigrant group that successfully met the enormous challenges of social and economic adjustment in a new country. Faced with an economic environment radically different from any they had known before, and with little relevant experience from the past available for guidance, these Jews transformed Jewish practice even as they transformed nearly everything else in their lives. In the process, Judaism itself has entered a new phase in its long history. American Jews were responsive in creative ways to major events in the Jewish world outside the United States. However, the most important religious contribution of American Jews lies in their attempts to adapt Jewish observance to a community of highly educated, economically engaged members for whom time is a scarce and high valued resource. In this context the distinctively American synagogue movements – Reform, Conservative, Reconstructionist, and Modern Orthodox – can be viewed as alternative solutions to this problem. Whether or not they survive the test of time in their current forms, they have surely laid the

A retrospective: the economics of American Judaism

35

foundation for the Jewish community of the future to engage meaningfully in an ancient religion in an economic environment totally unlike the past.

Notes 1 Barry R. Chiswick, “The Economic Progress of Immigrants: Some Apparently Universal Patterns,” in Contemporary Economic Problems 1979, ed. William Fellner (Washington, DC: American Enterprise Institute, 1979), 357–99; “Are Immigrants Favorably Self-Selected?,” American Economic Review 89, 2 (1999), 181–85; Barry R. Chiswick and Paul W. Miller, The Economic Cost to Native-Born Americans of Limited English Language Proficiency (report for the Center for Equal Opportunity, New York City, 1998). 2 Barry R. Chiswick, “Differences in Education and Earnings Across Racial and Ethnic Groups: Tastes, Discrimination, and Investments in Child Quality,” Quarterly Journal of Economics 103 (1988), 571–97. 3 Barry R. Chiswick, “Labor Supply and Investment in Child Quality: A Study of Jewish and Non-Jewish Women,” Contemporary Jewry 9, 2 (1988), 35–53. 4 Andrew Godley, Jewish Immigrant Entrepreneurship in New York and London 1880–1914: Enterprise and Culture (New York: Palgrave, 2001). 5 Barry R. Chiswick, “Labor Supply and Investment in Child Quality: A Study of Jewish and Non-Jewish Women,” Contemporary Jewry 9, 2 (1988), 35–53; “Working and Family Life: The Experiences of Jewish Women in America,” Papers in Jewish Demography 1997 (2001), 277–87. 6 This rate of increase from low- to high-skilled occupations was much faster than in the general population. See Barry R. Chiswick, “The Occupational Attainment and Earnings of American Jewry, 1890–1990,” Contemporary Jewry 20 (1999), 68–98. 7 Carmel U. Chiswick, “The Economics of Contemporary American Jewish Family Life,” in Coping with Life and Death: Jewish Families in the Twentieth Century, ed. Peter Y. Medding, vol. 14 of Studies in Contemporary Jewry (New York: Oxford University Press, 1998), 65–80. 8 Jenna Weissman Joselit, The Wonders of America: Reinventing Jewish Culture 1880–1950 (New York: Hill and Wang, 1994). 9 R. Stephen Warner and Judith G. Wittner, eds., Gatherings in Diaspora: Religious Communities and the New Immigration (Philadelphia: Temple University Press, 1998). 10 Carmel U. Chiswick, “The Economics of American Judaism,” Shofar 13, 4 (1995), 1–19. 11 Jack Wertheimer, “Jewish Education in the United States: Recent Trends and Issues,” in American Jewish Year Book 99 (1999), 3–115. 12 Carmel U. Chiswick, “Economic Adjustment of Immigrants: Jewish Adaptation to the United States,” in Jews in America: A Contemporary Reader, ed. Roberta Rosenberg Farber and Chaim I. Waxman, Brandeis Series in American Jewish History, Culture, and Life (Hanover: Brandeis University Press, 1999), 16–27; “The Economics of Jewish Immigrants and Judaism in the United States,” papers in Jewish Demography 1997 (2001), 331–44. See also Jack Wertheimer, A People Divided: Judaism in Contemporary America (New York: Basic Books, 1993). 13 Shelly Tenenbaum, A Credit to Their Community: Jewish Loan Societies in the United States 1880–1945 (Detroit: Wayne State University Press, 1993). 14 For a general analysis of this phenomenon in American religious communities, see R. Stephen Warner, “Work in Progress Toward a New Paradigm for the Sociological Study of Religion in the United States,” American Journal of Sociology 98, 5 (1993), 1044–93. 15 Helen Roberts, “American Jewish Donations to Israel,” Contemporary Jewry 20 (1999), 201–13; Jack Wertheimer, “Current Trends in American Jewish Philanthropy,” in American Jewish Year Book 97 (1997), 3–92.

Part II

Immigrants

4

The economics of Jewish immigrants and Judaism in the United States*

Jews have lived in the United States since colonial times, always as a very small minority. Statistics vary greatly according to the criteria chosen for identifying individuals as Jews, but by the broadest definition, in 1997 they constituted no more than 2.1 percent of the U.S. population (DellaPergola, 1999).1 The great majority were descendents of immigrants who arrived during the period of mass migration between 1881 and 1914, when Jews from Russia and Eastern Europe accounted for some 9.4 percent of the 22 million new immigrants to the U.S. (Kuznets, 1975; Chiswick, B., 1991).2 The sheer size of this influx made them one of the largest Jewish communities in the world, and the subsequent destruction of European Jewry would make them the largest.3 So while immigrant Jews may have been a tiny minority in their own country, the community that they and their descendents formed has had a very large influence on twentieth century Judaism. The immigrant experience of American Jews is now the stuff of history and museum exhibits. The Jewish community is now largely native-born, well educated, suburban, and middle class. Each year fewer of its members have direct experience in their immediate families with first- or even second-generation immigrants. Yet the turn-of-the-century immigrants from Czarist Russia had a formative effect on American Jewish culture. Elsewhere, much has been written about the many secular contributions of Jewish immigrants and their descendents. This paper considers how their economic decisions would have implications for Jewish civilization in generations to come, not only for the development of the United States as a center of modern Jewish culture but also for the emergence of a Jewish demographic crisis of major proportions. At the beginning of the twentieth century the American Jewish community was so overwhelmingly dominated by immigrants that its Judaism was effectively an “immigrant” religion, helping anchor its members in a familiar environment even as it supported their efforts at economic assimilation (Warner, 1998). As it traces religious change during the process of economic adjustment, the structure of this paper follows the standard model of economic assimilation as outlined briefly in the following section. We shall then look at the economics of religion among newly arrived “greenhorns,” at religious change during the period of rapid * Reprinted with permission from Papers in Jewish Demography 1997 (2001), pp. 331–344.

40

Economics of American Judaism

upward mobility, and at the religion of economically assimilated foreign-born Jews. We shall consider consequences for subsequent generations, the American children and grandchildren of immigrants, and finally conclude with a brief summary of implications.

The economics of immigrant absorption Human capital is any economic attribute acquired through previous experience, whether purposefully or not, as long as it is inalienably embodied in a person. This includes skills acquired by prior education or training, but it also includes such general knowledge as language, social skills, or familiarity with particular consumption patterns. Many types of human capital are shared by people in different countries (e.g., a common language, carpentry, medical knowledge) and are therefore transferable across labor markets. Other types may be specific to an immigrant’s country of origin (e.g., a local language, workplace customs, familiarity with legal institutions) and have little value in the destination. New immigrants are at a disadvantage in the labor market relative to native workers with the same type and level of observed transferable skill, since native workers have higher levels of destination-specific human capital. Although some transitions are easier than others, new immigrants nearly always find that investments in new country-specific human capital are needed for them to “catch up” with their native counterparts. It is also helpful to distinguish between skills that augment productivity directly (production skills) and skills that effectively raise earnings by improving decision-making (allocative skills). Economic choices made by good decision-makers are often rewarded with higher earnings, so people with high levels of allocative skill get positive feedback from experience and develop more confidence about undertaking new ventures with uncertain outcomes. Allocative skill also enhances a person’s ability to adapt to economic change, an ability that is both transferable to and productive in an immigrant’s new country. Among people with a given type and level of production skill, those choosing to migrate are likely to have high levels of allocative skill (and therefore higher potential earnings), whether the comparison is with non-migrants in the country of origin or non-migrants in their country of destination. This self-selection criterion is especially important for immigrants to the United States, which has an international reputation for providing opportunity to people with high entrepreneurial abilities. The economic absorption of immigrants, a process illustrated by the graph in Figure 4.1, may be understood by referring to the various types of human capital. The heavy curve in this graph depicts the earnings experience of a typical immigrant as time passes since entry into the U.S. labor force. The dotted curve is the typical experience–earnings profile of a native worker with skills comparable to an immigrant’s observed skills (e.g., with the same occupation and schooling level). The shape of the dotted profile illustrates the relatively low earnings of a new entrant to the labor force, reflecting his or her lack of experience, and how earnings rise over time as workers acquire human capital through some

Economics of Jewish immigrants and Judaism in the United States

41

Annual Earnings Foreign born

Native born

5 10 15 20 25 30 35 40 45 50 Years in U.S. Labor Force

Figure 4.1 The earning of immigrants relative to natives.

combination of training and experience. The profile levels off and perhaps even declines somewhat in later years, partly because of the depreciation of skills earned early in life, partly because of deterioration in health, and partly because of workplace changes related to retirement. A new immigrant arrives with less country-specific human capital than his native counterpart and is therefore at an earnings disadvantage during his or her early years in the labor force. But immigrants are self-selected for high levels of allocative skill, suggesting that if they had as much country-specific skill as a native their earnings would be higher than average. This gives the immigrant a strong incentive to invest as early as possible in such country-specific skills as language, workplace customs, and information about opportunities for advancement. The earnings of new immigrants are especially low (relative to those of natives) during the first few years not only because they lack these skills but also because they may accept a low-paid “immigrant” job if it speeds up the acquisition of country-specific human capital. Comparing the experience–earnings profiles of immigrants and natives in Figure 4.1 suggests three phases in an immigrant’s work life. During the first few years the immigrant is at a marked earnings disadvantage and focuses on making country-specific investments in human capital. Then follows a period of about 15 to 20 years characterized by rapidly increasing earnings, often accompanied by upward social mobility, as the immigrant directs his skills toward building a business or advancing in his chosen career. The third phase, typically beginning about 20 or 25 years after arrival, is characterized by economic assimilation with earnings and consumption patterns similar to natives with comparably high levels of allocative skill. This is reflected in Figure 4.1 by an immigrant

42

Economics of American Judaism

experience–earnings profile that is higher than that of the average native, presumably because the immigrants are self-selected to have more than the average amount of allocative skill. In addition to these workplace investments in human capital, immigrants are also investing in consumption-related human capital to enhance their experiences with family, community, and religion. These investments compete with the time, energy and other resources of the immigrant in each phase of labor force adjustment, suggesting ways in which the consumption patterns of immigrants might differ systematically from that of natives. In particular, the high market reward for country-specific skills is an incentive to postpone other investments in the early years and concentrate on work-related improvements. If delay in an investment also reduces its value, immigrants can be expected to invest less than natives in their consumption-related human capital and to alter its quality accordingly. As a religion, Judaism is relatively human-capital-intensive in its emphasis on study and informed participation in ritual. Even in ancient times Jewish parenting responsibilities emphasized the importance of Jewish education, not only formally but also informally within the family and community and in the many opportunities provided by the observance of Jewish holidays.4 This traditional emphasis on education reflects the high productivity of religious human capital in enhancing the quality of Jewish time (Iannaccone, 1990). Indeed, although it is possible to practice Judaism with very little prior investment, it is far more common for a newcomer (whether a “new” or a “returning” Jew) to feel a pressing need for study and learning to improve the quality of his/her Jewish observance. Jewish skills complement and compete with other investments, whether workrelated secular human capital or the various skills associated with leisure activities. Moreover just as consumption patterns are influenced by the relative price (time and money) of Jewish goods and services, education patterns are affected by the relative rates of return to Jewish investments. The real wage (i.e., consuming power per hour worked) of an immigrant is typically higher than that earned in the country of origin, with two consequences for religious observance. First, it raises the cost of time relative to purchased goods and services, so immigrants perceive time to be more “scarce” than they did in the old country. This induces timesaving changes in all non-work activities, including religious observance and related practices. Second, the higher wage rate also raises rates of return to investment in work-related human capital, especially in country-specific work skills, and thus typically skews the human capital investment of immigrants toward the secular (i.e., non-religious). Both of these effects constitute an incentive for change in religious observance and practices among immigrant populations, an incentive that is intensified among Jews because of the high human-capital intensity of their religion. Phase I: immigrant Judaism In the decades surrounding the turn of the twentieth century, the period of heavy immigration, Jewish men and women were eager customers for all sorts of

Economics of Jewish immigrants and Judaism in the United States

43

“Americanizing” education. If their participation in evening classes for English and “citizenship” seemed disproportionate to their numbers, surely this was an economic response to the high rate of return to investment in these country-specific forms of secular human capital.5 A popular Yiddish-language literature sprang up to educate consumers in the “modern” (American) way of cooking and nutrition, parenting, health care and hygiene, homemaking, matchmaking, and a host of other activities (Joselit, 1994). Public schooling represented an investment with very high rates of return, and Jewish immigrant parents placed a high priority on their children’s secular educational achievement. Indeed, Jewish immigrants wanted their children to avail themselves of the many opportunities, for leisure as well as work, which they themselves had been denied in the old country. Religious change among the new Jewish immigrants would have been an afterthought as their energies were intensely focused on assimilation in the secular sphere. Much of the Jewish communal infrastructure (synagogues, kosher food sources, communal charities) was transferred from Russia to the United States with relatively little stress, and flourished in the American environment of religious pluralism and tolerance.6 Synagogues in the immigrant neighborhoods tended to be small storefront affairs, sometimes organized around old-country communities (landsmanshaftn) so as to maximize familiarity (that is, the transferability of religious human capital acquired prior to migration). The institutional structure was often informal, with congregants taking turns at officiating and housekeeping chores, and a teacher being hired to provide minimal training for the young.7 Alternatively, a self-styled rabbi might readily establish his own shul (study place, synagogue), effectively setting himself up in a business utilizing his origin-country religious skills. Persons choosing this strategy ran the gamut from scholars of renown to pedestrian teachers and in most cases the poverty of the community combined with non-observance to make it a particularly unremunerative line of work. Indeed, such rabbis soon acquired a reputation of being luftmenschen who couldn’t land or keep a “real” American job. Most of the new immigrants concentrated on acquiring country-specific secular human capital, with little energy left for religious change. High wages (relative to the old country) provided an incentive for the immigrants to give of their time in return for market goods, and this was usually achieved by the simple expedient of reducing synagogue attendance and skimping on other time-intensive religious practices. For many Jews this neglect of religion would be temporary, part of their immediate adjustment process as immigrants, and religion would receive more attention after these early investments had paid off in the form of higher wage rates and incomes. By then, however, they would be moving out of the immigrant neighborhoods and into the middle class, forming new congregations where their dramatic increase in wage rates would be reflected by a comparably dramatic change in religious lifestyle. Synagogues in the old immigrant neighborhoods would lose their “market” and decline from inattendance and neglect, but with very few exceptions would exhibit no major change in religious practice. Meanwhile Jewish religious training and education had to compete not only with secular pursuits for scarce time, but also with non-religious Jewish activities.8

44

Economics of American Judaism

Whereas the religious human capital acquired by immigrants in old-country Jewish schools was supplemented by informal training at home and in the community, less was available through these avenues to their American-born children. Self-selected not only for high levels of entrepreneurship, but also for low levels of religiosity, recently-arrived Jewish immigrants gave only perfunctory attention to investments in their children’s religious human capital. Jewish schools in the immigrant neighborhoods were of uneven quality, and few were capable of providing religious human capital in a form suited to the middle-class American world in which the children would live as adults. If the immigrants were themselves self-selected from groups with relatively low levels of religious human capital, they passed on even less to their American children during the early postmigration years. Phase II: an American Jewish middle class The emphasis on secular investments in human capital among Jewish immigrants and their children would virtually transform the community in a very short period of time. Blue-collar laborers and craftsmen constituted 80 percent of the adult male Jewish work force in 1900, but only 25 percent by 1948, and this declined to less than 10 percent by 1980 (Chiswick, B., 1986, 1991). In contrast, managerial occupations (including self-employment) increased from 8 percent in 1900 to 45 percent in 1948. The professional occupations were also becoming more prevalent, especially law, medicine, and college teaching. Indeed, by 1948 some 60 percent of American Jewish men were working in the high-level occupations associated with business and the professions, a proportion that would remain fairly stable throughout the second half of the twentieth century. Thus the first half of the twentieth century was a transition period during which American Jewry was transformed from a community of low-wage, blue-collar immigrants to one of high-wage, white-collar suburbanites. The speed with which this was accomplished reflects the intensity of investment in secular human capital by Jewish men and women. Behaving as true partners in support of their husbands’ specialization in the labor market, Jewish women took responsibility not only for family life but also for traditionally masculine jobs in Jewish communal services (usually on a volunteer basis), and in Jewish education. From fundraising to social work to teaching in Jewish schools, women filled what would otherwise have become a vacuum in the Jewish community as men increasingly disengaged themselves from these activities as well as from the ritual of the synagogue. The rituals, customs, and practices that gave texture to Jewish religious life during this period tended to be outside the synagogue, often related to the holiday calendar and the observance of major life-cycle events. These have been characterized as following two underlying trends: a growing “consumerism” and an increased emphasis on family traditions with a strong component of nostalgia (Joselit, 1994). The former is an obvious adaptation to an environment where time is costly and goods are relatively cheap. The latter is also an adaptation to the high price of time, combining two time-intensive activities (religious observance and

Economics of Jewish immigrants and Judaism in the United States

45

family life) in ways that enhance their mutual complementarity and reduce the total time devoted to both.9 Phase III: developing an American Judaism In contrast to the rapid economic transitions of the previous period, the second half of the twentieth century was one of economic stability. Higher education became the norm for Jewish youth, with about 40 percent of both men and women obtaining post-college degrees, and high-level occupations accounted for about two thirds of all adult Jewish men throughout the period 1948–1990 (Chiswick, C., 1995). Jewish demographic patterns reflected the high wage rates associated with these occupations: low birth rates; large investments in the health and education of children, girls as well as boys; late marriages; and (increasingly) two-career families. With the aging and retirement of first- and second-generation immigrants, managerial occupations had declined by 1990 to a mere 17 percent of the adult Jewish male labor force. In contrast, professional occupations increased steadily to 27 percent by 1970 and 47 percent by 1990.10 Low levels of Jewish human capital and high wages made it both difficult and costly for the American-born generation of adults to participate in Jewish observance, even as increased levels of income and economic security increased their demand for religion. They could afford new buildings for synagogues and schools, often choosing to do so in magnificent style, yet few attended religious services with any frequency. The professional rabbinate grew in importance, substituting its hired skills for those provided directly by members of the congregation. Most synagogues operated afternoon Hebrew schools (complete with a building, teaching staff, and graded classrooms modeled after the public elementary school) to instruct children in the rudiments of Hebrew language and Jewish history (Wertheimer, 1999).11 Yet a high opportunity cost of time stimulates not only timesaving innovations, but also increases the quality of time devoted to each activity. In fact, a perceived need to enhance the quality of religious activity is a salient characteristic of American Jewish experience. Although the timesaving practices shared by virtually all American synagogues are frequently noted, obvious quality-enhancing practices tend to be taken for granted: the availability of English translations for Hebrew readings, modern English as well as Hebrew in parts of the liturgy, sermons that emphasize “relevance” to contemporary American life, even the dependence on a professional rabbinate. The development of American synagogue movements (primarily the Reform, Conservative, and Reconstructionist) was stimulated and reinforced by the perceived need to raise the quality of Jewish experience.12 Although each movement has its own distinctive features, these tend to reflect different preferences as to the specifics rather than differences in basic approach. They all fundamentally accept the notion that Jewish observance must be adapted in order to compete for time with secular activities, and they all seek to preserve the fundamental elements of Jewish religious tradition by enhancing its compatibility with the current structure of economic incentives.

46

Economics of American Judaism

Table 4.1 Denominations of Jewish adults, 1970 and 1990 (percent distribution)a Synagogue movement

1970/71 adults All

1990 households All

Nativeb

Immigrantb

All movements

100 (48)

100 (41)

100 (28)

100 (45)

Orthodox Conservativec Reform None or other

11 (7) 42 (24) 33 (17) 14 (—)

6 (4) 33 (15) 35 (20) 26 (2)

2 (1) 27 (11) 43 (13) 28 (3)

17 (12) 37 (22) 20 (9) 26 (2)

Sample size

5790

1979

1120

162

Source: Rebhun (1993). Notes a Percent of all respondents self-identifying with each movement. Figures in parentheses ( ) include only synagogue members. b “Immigrants” include all foreign-born persons. “Natives” include only those U.S.-born persons for whom both parents were also U.S.-born. c Includes Reconstructionist.

As immigrant Jews became middle-class suburbanites, most shifted their allegiance to these synagogue movements. By 1990 only 7 percent of American Jews identified themselves with the various Orthodox movements while some 45 percent and 39 percent self-identified with the Conservative/Reconstructionist and Reform movements, respectively.13 Moreover, the pattern varies by immigrant generation: the Orthodox account for fully 17 percent of foreign-born American Jews but only 2 percent of the native-born. (See Table 4.1 for more detail.) Indeed, by the middle of the twentieth century American Jews clearly identified with, and were identified by, these distinctive adaptations of an ancient religion to its new socioeconomic environment. Another adaptation to the problem of low Jewish human capital among the second-generation immigrants was a sort of generational division of labor. Older immigrants, with both a lower value of time and more old-country Jewish human capital, effectively substituted for their children in adult Jewish roles. In a typical three-generation family it would be the grandparents who filled lay positions in the synagogue, who hosted family gatherings on Jewish holidays, who said the appropriate blessings and told stories to the children. Despite the irony of their own relative neglect of religion, immigrants became not only the custodians and teachers but the very benchmarks of Jewish religious tradition for their American grandchildren. Phase IV: crisis and instability If one consequence of rapid economic success during the earlier period was that each generation had less Jewish knowledge and religious experience than the one before, the high-wage stability of this period is accompanied by continuing

Economics of Jewish immigrants and Judaism in the United States

47

religious innovation and increased investment in Jewish human capital.14 In part this reflects a consumption pattern associated with higher income levels, as children from financially secure, middle-class suburban families have displaced the immigrant generations. It also reflects the inherent economic instability associated with the combination of very low levels of religious human capital and very high levels of secular human capital.15 There are two economic responses to this situation: a reallocation of time from low- to high-productivity activities, and a reallocation of investments so as to raise the relative productivity of Jewish time. Hence the “paradox” of American Judaism in the late twentieth century: rapid loss of members to assimilation and outmarriage even as the community as a whole exhibits a strengthening of religious life and cultural vibrancy. The trend most easily documented, and most visible to the non-Jewish world, is the popularity of Jewish religious practices compatible with both low religious time inputs and low Jewish-specific investments in human capital. Many American Jews understand Judaism as an essentially secular ethnicity that they celebrate with cuisine, humor, a few Yiddish words, and family gatherings on holidays and life-cycle occasions with little religious content. Their understanding of Jewish belief focuses on Judaism as an ethical system, on the importance of social justice (tikkun olam), and even on Jewish ecological values (e.g., the religious obligation to plant trees), all of which are fully compatible with the secular American liberal ideology that dominates the Jewish political agenda. By emphasizing such aspects of Judaism, and by eschewing those aspects that would make them either visible or distinctive, they maximize the overlap between secular and religious investments and reduce the rate of return to investments in specifically Jewish human capital. American Jews following this approach find the Reform synagogue movement most hospitable to their preferences, and Reform Judaism is expanding its share of American Jewry as religiously unskilled Jews shift their identities and affiliations away from the more demanding Conservative and Orthodox movements (Rebhun, 1993). This membership increase is especially noteworthy since, as the most “ecumenical” branch of American Judaism (i.e., with the least emphasis on distinct group boundaries), the Reform movement is also rapidly losing members to outmarriage and religious assimilation (Kelley, 1972).16 Indeed, increases in religious outmarriage and the growth of Reform Judaism may both be understood as symptoms of (economic responses to) a low level of religious human capital and hence, as a lingering consequence of economic decisions made by Jewish immigrants and their children. Another observable response of American Jews to low levels of Jewish human capital is a new interest in upgrading religious skills (for themselves and their children), a search for ways to enrich the quality of Jewish time and exploit complementarities between Judaism and other forms of human capital. Indeed, all American synagogue movements are characterized by continuing innovation and increased intensity of Jewish religious observance, an economic response that effectively raises the productivity of Jewish investments. Reform synagogues have restored to their ritual many holiday observances and synagogue practices

48

Economics of American Judaism

(including especially the use of Hebrew, the wearing of kipa and tallit, and the Bar Mitzvah) deliberately excluded by earlier generations. The Orthodox movement has slowed its long membership decline with two (generally alternative) responses to the perceived need for more religious human capital, one developing strategies for combining a Jewishly observant lifestyle with a high-level secular occupation, and the other reviving Yiddishkeit and the old-country traditions of Russian Judaism. Less picturesque – but possibly more significant – has been the growth of Jewish human capital in Conservative synagogues, a movement which accounts for well over a third of American Jews. The Conservative movement places heavy emphasis on Jewish education, including adult education, for Americans with active secular lifestyles. By expanding Jewish schools and upgrading the Jewish content of their curricula, Conservative synagogue practice reflects a steady increase in expectations for the Jewish human capital of congregants. A recent survey of Conservative Bar/Bat Mitzvah celebrants and their families found that no fewer than 65 percent of the parents thought their children had more knowledge of Judaism at age 13 than they had acquired at the same age, while fully 95 percent wished their children to be better educated in Jewish content than themselves (Wertheimer, 1996).17 Egalitarianism (that is, similarity of religious privileges and responsibilities for men and women) may also be understood as part of the pattern of innovations that adapt religious practices to the economic environment. Although it takes different forms in each of the synagogue movements, it is evident everywhere and has become the norm in most non-Orthodox synagogues. The high opportunity cost of women’s time requires greater efficiency in the production of women’s religious experience, an incentive to improve the “quality” of synagogue life from their perspective. This is the same incentive that leads to convergence in the investment patterns of American men and women in many family, consumption and work activities. Jewish egalitarianism is also consistent with the development of complementarities between family and religion, a shift in the locus of Jewish experience from home to synagogue. Indeed, from an economic perspective egalitarianism is an effective innovation for raising the quality of Jewish time in a high-wage community, reinforcing the family orientation of synagogue experience and integrating the synagogue into Jewish family life. Aside from strengthening and innovating observances associated with Jewish holidays and life-cycle events, popular support for (and participation in) Jewish education, music, art, travel, literature, and journalism have flourished in the United States to the point of shaping the American Jewish community’s very definition of itself. This phenomenon has been further stimulated by some midcentury changes in relative prices that effectively reduced the cost of Jewish practice and learning. Certainly the decline of antisemitism has been important in this respect.18 Much more important, however, has been the emergence of Israel as a sovereign state where a somewhat different portfolio of religious human capital (especially intensive in Hebrew language fluency) has been accumulating. For example, the efficiency of American Hebrew schools has been greatly

Economics of Jewish immigrants and Judaism in the United States

49

improved by the development in Israel of teaching materials and teacher training programs, and their curriculum has been enriched by the popular culture of a Hebrew-speaking Israeli population.

Economics and the future of American Jewry This paper has focused on the economic experience of Jewish immigrants and its effect on Jewish observance and communal institutions in the United States. The analysis was divided into four phases corresponding to the investment patterns typical of all immigrants. In the first phase, Yiddish-speaking American Jewish immigrants invested heavily in English and other country-specific secular human capital with correspondingly little allocation of time or money to Jewish religious life. In the second phase, characterized by a high value of time and high rates of return to secular human capital, they continued to allocate few resources to religious human capital, and middle-class American Jewish observance became increasingly nostalgic and goods-intensive. As a consequence, by the time they reached the third phase they had attained high levels of secular achievement and financial stability, and were ready to turn their attention to religious investments, their low levels of Jewish human capital would skew them toward non-human capital and away from participatory investments. The fourth phase is associated with the maturing of the community into nonimmigrant status whose members are the middle-class grandchildren and greatgrandchildren of immigrants. The economic analysis in this paper showed how high levels of secular human capital and low levels of religious human capital are part of the immigrant heritage of this well-assimilated Jewish community. The economic incentives embodied in this heritage lead to two mutually incompatible and hence alternative strategies, one being to increase investments in Jewish human capital and the other being to neglect them. By the end of the twentieth century both of these responses were characteristic of American Jewry, the first by a remarkable explosion of religious education and culture and the second by an equally remarkable drift toward assimilation and outmarriage. The economic perspective developed here suggests that this rift in the religious life of American Jewry may be an unintended consequence of the extraordinary labor market success achieved in an extremely short period of time by Jewish immigrants and their offspring.

Acknowledgements The author is grateful to Stephen Warner and the Chicago Area Group for the Study of Religious Communities (CAGSRC) for inspiration and encouragement in the development of this study. An earlier version of this paper appeared in Farber and Waxman (1999) and served as the basis for the Horizons of Knowledge lecture at Indiana University in October 1998. The paper has benefited from comments by many people, including participants in the Twelfth World Congress of Jewish Studies, but the author assumes sole responsibility for its contents.

50

Economics of American Judaism

Notes 1 The 1990 National Jewish Population Survey (NJPS) enumerates all respondents self-identifying as Jewish by religion, by ethnicity, by parentage, or by upbringing, as well as any non-Jewish members of their households. The figures in the text are based on a broad definition that includes all self-identified Jews by any of these criteria. 2 Usually referred to simply as “Russian Jews,” fully 76 percent came from the Czarist Russian Empire, 19 percent from Austria-Hungary, and 4 percent from Romania (Kuznets, 1975). 3 In 1997 American Jewry accounted for 44 percent and Israel 36 percent of the world’s Jewish population. France has the third largest Jewish population with only 4 percent, and the remainder is scattered in even smaller concentrations (DellaPergola, 1999). 4 The obligations that devolve upon a father concerning his son are circumcision, redemption (in the case of a firstborn son), teaching Torah, teaching an occupation, marriage, and swimming. (Mishnah Nashim: Kiddushin). The first two take place in early infancy. The others are investments in human capital that enhance religious life, work, family, and consumption (health, safety, recreation?), respectively. 5 Unlike Jews from Czarist Russia, many other groups included “temporary” immigrants whose initial plan was to earn enough to improve their economic situation in the country of origin. Even if they ended up becoming Americans, their early incentive would have been to invest less than the Jews in country-specific human capital. 6 In part this was because Judaism was fully adjusted to its status as a minority religion which could be transported to different cultural settings. Immigrants practicing a state religion in their country of origin found the transition to minority status much more difficult (Warner, 1993). 7 Some congregations of this sort hired a cantor to sing the synagogue liturgy, especially on the High Holy Days. Indeed, one strategy for financing the larger synagogues involved selling tickets (presumably to non-regular attendees) for services sung by a well-paid cantor. 8 Although Hebrew is the language of Jewish religious life, Yiddish (lit. Jewish) was the everyday language of the vibrant Jewish culture in America as it had been in Europe. Spoken both at home and on the street, Yiddish was the language of informal Jewish education. Hence the irony that the Jewish linguistic contribution to the American melting pot is invariably associated with secular pursuits (e.g., literature, entertainment, journalism, the labor movement, cuisine) rather than the religion by which Jews are identified. 9 Subtler, perhaps, is that synagogue attendance in America became an activity in which families participate as a unit, enhancing the mutual complementarity of two intrinsically time-intensive activities. For example, family seating (that is, without separation of men and women) was one of the earliest American innovations in the synagogue, and the presence of children is typically the main impetus for joining a synagogue. 10 Jewish professionals also became less concentrated in their areas of specialization, diversifying beyond medicine and law into a wide variety of technical fields. They typically work in predominantly non-Jewish environments where they are a small religious minority; even though a large proportion of Jews are professionals, only about five percent of all professionals are Jews. Most American Jews are quite comfortable with this situation and do not perceive religion to be an important factor in their work environment. 11 Beginning at the age of 8 or 9 (fourth grade), Jewish children would attend twice a week after school (for about two hours) and on Sunday mornings. Few continued this schooling into their teens, the greatest attrition occurring after the Bar Mitzvah ceremony at age thirteen. 12 Although these synagogue movements may have roots elsewhere, they have developed during the twentieth century along distinctively American lines. Reconstructionism, although a branch of the Conservative Movement for many years, was responsible for

Economics of Jewish immigrants and Judaism in the United States

13

14

15

16 17

18

51

some important innovations during the period under discussion and continues to be influential; it has only recently become independent and is still very small, but appears to be growing in popularity. The remaining 9 percent identified themselves as without denomination, as secular Jews, or as having “no” religion (including atheists and agnostics). These figures come from the 1990 National Jewish Population Survey (NJPS) and include all Jews by birth exclusive of converts to other religions. The very term “assimilation” has changed its meaning during this process. In the first two phases it referred to occupational success in the non-Jewish world and to adopting consumption patterns similar to those of other Americans, including the use of English as the everyday language. In contrast, today it almost always refers to the loss of Jewish religious identity. Masked somewhat by the intergenerational division of labor, this imbalance became apparent as the immigrant generation aged and thus ceased to be available as a repository of religious knowledge. Major events outside the United States, especially the destruction of European Jewry (Holocaust) and the establishment of the modern State of Israel, are also credited with stimulating a renewed interest in Jewish religious life. Yet the economic analysis suggests that the demand for Judaism in America would have been greater during the second half of the twentieth century than the first even in the absence of these influences. According to the NJPS, some 38 percent of the first marriages of self-identified Reform Jews were to a non-Jewish spouse; the figure is considerably higher if the population is limited to younger marital cohorts. This survey of children who had been Bar/Bat Mitzvah in a Conservative synagogue in the United States or Canada during the Jewish year 5755 (1994–95) involved a telephone interview with 1,467 young people and one of their parents. It contains a wealth of information supporting the increased investment in religious human capital among Conservative Jews. Whether overt or of the “gentlemen’s agreement” variety, antisemitism in the United States was never as virulent or destructive as in Europe in general and Russia in particular. Despite its recent emergence in some possibly new forms, it is relatively rare and most American Jews are sufficiently insulated from its effects that its influence on their religious practice is negligible.

References Azzi, C. and Ehrenberg, R. (1975). “Household Allocation of Time and Church Attendance.” Journal of Political Economy, Vol. 83, pp. 27–56. Becker, G. S. (1981). Treatise on the Family. Harvard, Cambridge. Chiswick, B. R. (1986). “The Labor Market Status of American Jews: Patterns and Determinants.” 1985 American Jewish Yearbook, pp. 131–153. ——. (1991). “Jewish Immigrant Skill and Occupational Attainment at the Turn of the Century.” Explorations in Economic History, Vol. 28, pp. 64–86. ——. (1999). “The Occupational Attainment and Earnings of American Jewry, 1890–1990.” Contemporary Jewry, Vol. 20. Chiswick, C. U. (1995). “The Economics of American Judaism.” Shofar, Vol. 13, no. 4, pp. 1–19. ——. (1996). “Israel and American Jewry in the Year 2020: An Economic Analysis.” In: Gonen, A. and Fogel, S., eds. Israel 2020: Master Plan for Israel in the Twenty-first Century. The Macro Scenarios. Technion, Haifa. pp. 257–272. (in Hebrew; English version available from the author.)

52

Economics of American Judaism

Chiswick, C. U. (1998). “The Economics of Contemporary American Jewish Family Life.” In: Medding, P., ed. Coping with Life and Death: Jewish Families in the Twentieth Century. Studies in Contemporary Judaism, Vol. 14, pp. 65–80. DellaPergola, S. (1999). “World Jewish Population, 1997.” American Jewish Yearbook 1999, Vol. 99, pp. 543–580. Farber, R. R. and Waxman, C. I., (1999). Jews in America: A Contemporary Reader. Brandeis University Press. Iannaccone, L. R. (1988). “A Formal Model of Church and Sect.” American Journal of Sociology, Vol. 94 (suppl.), pp. S241–S268. ——. (1990). “Religious Practice: A Human Capital Approach.” Journal for the Scientific Study of Religion. Vol. 29, pp. 297–314. Joselit, J. W. (1994). The Wonders of America: Reinventing Jewish Culture 1880–1950. Hill and Wang, New York. Kelley, D. M. (1972). Why Conservative Churches Are Growing. Harper & Row, New York. Kuznets, S. S. (1975). “Immigration of Russian Jews to the United States: Background and Structure.” Perspective in American History, Vol. 9, pp. 35–126. Meyerhoff, B. (1979). Number Our Days. E. P. Dutton, New York. Rebhun, U. (1993). “Trends in the Size of American Jewish Denominations: A Renewed Evaluation.” CCAR Journal: A Reform Jewish Quarterly, Winter, pp. 1–11. Schultz, T. W., ed. (1974). Economics of the Family: Marriage, Children, and Human Capital. University of Chicago Press for the NBER. Warner, R. S. (1993). “Work in Progress toward a New Paradigm for the Sociological Study of Religion in the United States.” American Journal of Sociology, Vol. 98, pp. 1044–1093. ——. (1998). “Immigration and Religious Communities in the United States.” In: Warner, R. S. and Wittner, J. G., eds. Gatherings in Diaspora: Religious Communities and the New Immigration, Temple University Press, Philadelphia, pp. 3–34. Wertheimer, J. (1996). Conservative Synagogues and Their Members: Highlights of the North American Study of 1995–96. Jewish Theological Seminary of America, New York. ——. (1999). “Jewish Education in the United States: Recent Trends and Issues.” 1999 American Jewish Yearbook, Vol. 99, pp. 3–115.

5

Economic transformation of American Jewry*

The economic transformation of American Jewry has elements of continuity and change. Similar patterns repeat themselves, including the economic hardships of new immigrants and the subsequent dramatic economic improvements through the development and application of skill and entrepreneurship. Uncovering and expanding niches in the growing segments of the economy is a recurring theme. Yet as the economy and economic opportunities have changed, so too has the occupational position of American Jewry.

The early years of American Jewry The first Jews to arrive in the colonies that were to become the United States landed in the then Dutch colony of New Amsterdam in 1654 and numbered only 24 persons. By the time of the American revolution there were two to three thousand Jews in a population of about 3 million (less than 0.1 percent), about half of Sephardic origin and half Ashkenazic. They were almost exclusively involved in trade, both coastal and ocean shipping, and were disproportionately concentrated in the commercial centers along the Atlantic seaboard from Newport, Rhode Island to Savannah, Georgia. In the early decades of the nineteenth century (primarily the 1830s and 1840s) German Jews came as part of a larger immigration from Germany and Central Europe. The German Jews did not concentrate in the seaport cities but were more generally dispersed throughout the country, including the South, the Midwest, and the Far West. Often starting out as peddlers, some advanced economically to owning small businesses, typically retail establishments selling a variety of products. A smaller number (e.g., Nieman, Marcus, Strauss, Gimbel, Saks and Goldwater) prospered and founded what later became large and well-known department stores. By 1880 American Jewry numbered about 200,000 to 300,000 persons, or about 0.5 percent of the population, mostly Ashkenazic immigrants from Germany and their descendants. * Co-authored with Barry R. Chiswick. Reprinted with permission from Hebrew translation in New Jewish Time: Jewish Culture in a Secular Age – An Encyclopedic View. Israeli Keter Publishing House, 2007. Vol. D, pp. 101–106.

54

Economics of American Judaism

The basic economic characteristic of both the Sephardic and German Jews was that they found niches in growing sectors of the broader economy. These niches were primarily in trade, whether international or local, and were facilitated by social and business networks among Jews. For example, data are available for the occupations held by American Jews in 1885. Fully 76 percent of the employed male Jews (primarily of German birth or parentage) were employed in clerical or sales occupations, at a time when such jobs employed 8 percent of native-born white men and only 5 percent of the foreign-born. As harbinger of things to come about 5 percent of Jewish men were in professional and technical occupations, in contrast to only 3 percent and 1 percent of the native-born white men and foreign-born men, respectively.

The great wave and its aftermath The 1880s witnessed the start of a transformation of the demographic and economic characteristics of American Jewry that must have seemed overwhelming at the time. This was the decade in which large scale immigration began of Jews from Eastern Europe and Russia, a wave that was to last until the 1920s when the United States imposed severe restrictions on the number of immigrants allowed into the country from Southern and Eastern Europe. From about a quarter of a million people in 1880 the American Jewish population grew (by immigration and natural increase) to over 1 million by 1900, 2 million by 1910, nearly 3.5 million by 1917, and nearly 5 million by the late 1930s. There have been periodic waves of Jewish immigrants to the United States since then: German refugees in the 1930s, Displaced Persons after World War II, Israeli immigrants and Russian Jewry in the late twentieth century. Yet these migration streams paled in comparison in terms of both their size and in their impact on American Jewry. The East European and Russian Jewish immigrants, unlike the German Jews, tended to concentrate in the large urban areas, especially New York City. While many were in sales and clerical jobs, most worked in blue-collar occupations classified as craft or operative (i.e., machine operators). In 1910, for example, among immigrants reporting to the census that Yiddish was their “mother tongue” or that of their parents, sales and clerical occupations accounted for 27 percent and 3 percent, respectively, but 32 percent were in craft occupations, another 22 percent were operatives. (Only 4 percent of these Jewish men worked as laborers and even fewer worked in agriculture.) In contrast, only 16 percent of native-born white men were in sales and clerical operations and 33 percent were in craft and operative jobs. Professional occupations accounted for 4 percent of these Jewish men compared to 5 percent of the non-Jewish white men. Immigrant Jewish women worked in shops and factories, especially in the garment industry where there were many Jewish employers. They often continued working in these jobs even after marriage, typically until the birth of their first child. Much of the sweatshop labor in the garment industry was performed by women working at home for piece rates to augment the family income, often assigning tasks to their children as well. Yet Jews had higher ambitions for

Economic transformation of American Jewry

55

themselves and their children. Jewish women attended settlement-house classes to learn American homemaking skills – everything from cooking to housekeeping to child rearing. Jewish children – both sons and daughters – were sent to school and kept there as many years as the family could afford. Jewish immigrants saw the American public school system as the fastest and surest route for realizing the opportunities available in their new country. Despite poverty, they tried to keep their children in school as long as possible. In 1990, 41 percent of Jewish men over age 64 – that is, immigrant men and their children born before 1925 – had completed programs of higher education. Among men born during 1925–1934 (most of whom were American-born children of immigrants) the percentage was 66 percent: 30 percent were college graduates, 16 percent had post-college technical or master’s degrees, and fully 20 percent had doctoral-level or professional degrees. Many of these men interrupted their schooling or worked part-time to support their families, while others earned advanced degrees after serving in the military. The comparable figures for women are equally impressive: 25 percent of those born before 1925 (immigrants and natives) and 41 percent of those born during 1925–1934 held at least a college degree. This commitment to higher education was exceptional among other immigrant groups and also in comparison with native-born Americans. Coinciding with the rise of profession-based technology during the twentieth century, it was the foundation for the dramatic socio-economic advancement of American Jewry. Already by 1910 the U.S.-born adult sons of Yiddish-speaking immigrants were demonstrating sharp upward occupational mobility – 11 percent were professionals and 20 percent were in clerical occupations, with only 27 percent in craft and operative jobs combined. Foreign-born Jewish men and their U.S.-born sons continued to move up the occupational scale faster than native-born non-Jewish men. By 1940, 6 percent of the foreign-born Jews were professionals and 28 percent were in managerial jobs. Among U.S.-born men in 1940, 15 percent of the sons of Jewish immigrants were in professional and 22 percent in managerial occupations, compared to 6 percent and 11 percent, respectively, for all U.S.-born white men. The Jews, regardless of whether immigrant or born in U.S., also exhibited a high degree of entrepreneurship. In 1940 some 41 percent of the foreign-born and 27 percent of the native-born Jewish men were self-employed. Among non-Jewish white men the self-employed were only 21 percent of the foreign-born and 27 percent of the native-born, although many of these were farmers. (Agriculture accounted for only 0.3 percent of the Jews but some 20 percent of U.S.-born non-Jewish white men.) The wives of these self-employed men often worked in the business as partners (e.g., in small retail or service establishments), as unpaid employees in key positions (e.g., bookkeepers or personnel managers), or as part-time workers (e.g., emergency substitutes or peak-period supplementary labor). Although the Jews and other immigrants (particularly the Italians) from Southern and Eastern Europe arrived in New York at roughly the same time, the Jews were disproportionately likely to become entrepreneurs. A high proportion of non-farm self-employment among Jews had also been characteristic of the Sephardic Jewish merchants in the Colonial period and the German Jewish

56

Economics of American Judaism

immigrants in the nineteenth century. This entrepreneurship helped the Eastern European and Russian Jewish immigrants find their own niches in the economy of the early twentieth century. There is a long-standing debate over whether “the Jews made the New York garment industry or the New York garment industry made the Jews,” to which recent economic research suggests the answer is: both. Similarly the American movie industry, which began in New York before moving to Hollywood, developed predominantly under the leadership of Jewish entrepreneurs in all aspects of the business.

Post-WWII changes in Jewish occupations In the fifty-year period from 1890 to 1940, while the American Jewish community grew rapidly in numbers and as a proportion of the population, their occupations changed from primarily blue-collar jobs (crafts and operatives) to primarily white-collar jobs (professional, managerial, and clerical). Over the next sixty-year period, from 1940 to 2000, their population level showed little change, their fraction of the U.S. population declined, and there was a rapid “professionalization” of the American Jewish labor force. Self-employment continued to be important, but its nature changed. The Jewish population of the United States increased from about 4.8 million in 1937 (3.7 percent of the total) to about 5 million in 1950 (3.5 percent) to nearly 6 million in the 1970s (2.8 percent), but appears to have declined to 5.5 million (2.2 percent) by 1990 and perhaps about 5.3 million (1.9 percent) by 2000. This decline is due to a number of factors which have offset the lower Jewish mortality rate, including a below-replacement fertility rate (lower than in the general population), a much smaller proportion of Jews in the immigration stream, and a dramatic increase in the proportion of Jews who marry non-Jews and whose children are at best weakly attached to the Jewish community. American Jews continued to emphasize the importance of education, preferring to live in neighborhoods with high-quality college-preparatory public schools. Among the cohort age 35–44 in 1990 – that is, born during 1956–65 – only 25 percent of the men and 31 percent of the women had less than a college degree. Some 36 percent of the men and 31 percent of the women held a college-level degree, while 39 percent of the men and 37 percent of the women held post-college degrees. For men the attainment of masters- and professional-level degrees had reached a high level early in the century, the proportion with each being about 18 percent and 20 percent, respectively, for each ten-year age cohort born after 1925. The comparable figures for women lagged behind that of men by several decades, rising to 9 percent and 28 percent, respectively, for the 1956–65 birth cohort. Nevertheless, the education of Jewish women was higher than that of women in any other American ethnic or religious group and by 1967 Jewish parents’ expectations for their daughters’ education was virtually the same as for their sons’. The proportion of white-collar workers among Jewish men has changed very little in the post-WWII period, from about 55 percent in professional and managerial occupations in the late 1950s to nearly 70 percent by 1980. (Among

Economic transformation of American Jewry

57

non-Jewish white men the corresponding proportion increased from 22 percent to 35 percent.) On closer examination, however, the data on white-collar Jewish occupational attainment reveal very dramatic shifts, out of managerial and clerical jobs and into professional occupations. In the early post-war period 14 percent of the Jewish men were professionals – about 6 percent were doctors, dentists, and lawyers – and 45 percent were in management. By 1990 more than 47 percent were professionals – 9 percent doctors, dentists, and lawyers – and only 17 percent were managers. Thus there has been a large shift out of managerial occupations and into the professions, which by 1990 employed nearly one out of two Jewish men (in contrast to one out of every five non-Jewish white men). Within the professional occupations there has also been a large shift, mainly toward greater diversity. In the early post-war period over 40 percent of Jewish professionals were doctors, dentists, or lawyers, but by 1990 Jews appeared in nearly all the professions and only 20 percent were in these “traditional” occupations. These occupational shifts were accompanied by a change in the self-employment status of American Jewish men. Self-employment declined from 56 percent in the early post-WWII years to 27 percent in 1990, compared to a decline from 36 percent to 14 percent among non-Jewish white men. While the decline in selfemployment in the general U.S. population is largely due to a decline in agricultural employment (only 3.6 percent of white men worked in agriculture in 1990), the decline among Jews is primarily due to a decline in managerial, craft, and sales occupations. Although American Jewish men are still more than twice as likely as non-Jewish white men to be in non-farm self-employment, they are more typically self-employed professionals than peddlers like their great-grandfathers, mom-and-pop store owners like their grandfathers, or small businessmen like their fathers. The occupations of American Jewish women have also changed dramatically during this period. In 1957 most Jewish women (approximately two-thirds) were not in the labor force, working as full-time mothers and homemakers and perhaps helping in their husband’s business as unpaid family workers. As Jewish families increasingly sent their daughters to college and subsequently to graduate or professionals schools, Jewish women increasingly entered the labor force in careers like their brothers’ that extended over their adult lifetime. By 1990 nearly threefourths of all adult Jewish women were in the labor force. This phenomenon was not related to any change in the marital status of Jewish women; in the 25–44 age cohort, for example, married women with school-age children (6–17 years old) participated in the labor force at virtually the same rate as all other women. In fact, by 1990 the education of women had converged so closely to that of men that twocareer families had become the norm in much of the American Jewish community.

Concluding remarks The labor market and economic status of American Jewry shows both continuity and change. For each of the great waves of immigrants over the past four centuries, initial status in the labor market was quite lowly. The Jewish immigrants, their children and grandchildren showed dramatic improvements, rising much higher

58

Economics of American Judaism

in the economic ladder in absolute terms and relative to others. In each of these instances self-employment was a predominant characteristic. Also in each of these instances being good business decision makers and finding profitable niches in the economic system, often involving innovations in product, method of production, or method of distribution played a pivotal role. Perhaps the Jews were “lucky” to have arrived in the United States at propitious moments in its economic history, or perhaps the United States was “lucky” to have had a skilled and entrepreneurial group of immigrants arrive at appropriate times to develop these industries. German Jews arriving in the middle of the nineteenth century entered retailing at a time of major expansion as the frontier moved west, but they were also instrumental in the transformation of American retailing from pushcart operations to department stores. The great wave of Russian Jews entered the garment industry at a time when technological change was yielding new opportunities, but their innovations in shop-floor organization and management in this industry would be a model for America’s subsequent managerial revolution. Twentieth-century technology required increased levels of specialization and sophistication which highly-educated Jews were in a position to provide, but American Jews are recognized disproportionately for innovative contributions to a wide variety of arts and sciences. American Jews rose to the challenge of technological change with imagination and skill, and the old question about whether the garment industry made the Jews or vice versa can be posed for a series of American industries over time and space. American Jews responded to economic opportunity by working hard and by sending their children to the “best” schools they could attend, using educational excellence as their criterion. Educational opportunities have been highly prized and sought after, for daughters as well as sons, and were typically an important determinant of the residential patterns of upwardly-mobile Jews. The result has been that Jews were able to realize much of America’s promise and to repay their country with enthusiasm and talent. By the end of the twentieth century American Jewry was a highly educated upper-middle-class community of two-career couples in a wide variety of professional and other high-level occupations.

Selected Bibliography Chiswick, Barry R. “The Occupational Attainment and Earnings of American Jewry, 1890–1990.” Contemporary Jewry 20 (1999): 68–98. Chiswick, Carmel U. “The Economics of American Judaism.” Shofar 13, no. 4 (1995): 1–19. Godley, Andrew. Jewish Immigrant Entrepreneurship in New York and London 1880–1914: Enterprise and Culture. New York: Palgrave, 2001. Joselit, Jenna Weissman. The Wonders of America: Reinventing Jewish Culture 1880–1950. New York: Hill and Wang, 1994.

Part III

Marriage and family

6

The economics of contemporary American Jewish family life*

The Jewish community in the United States has experienced a remarkable economic transformation during the twentieth century, from a community of impoverished immigrants to one of suburban professionals.1 This transformation may be thought of as following two overlapping phases. In the first half of the century, most American Jews were either immigrants or the children of immigrants, born in poverty or near-poverty. Jewish men during this period focused on upward occupational mobility, acquiring high levels of secular education and moving into middle- and high-level occupations with correspondingly high wage rates. During the later decades of the century, the community’s new socioeconomic position would be consolidated as second- and third-generation suburban Jews, both men and women, attained even higher levels of education and the community shifted from business to professional occupations. While the typical Jewish male at the beginning of the century may have been a tailor or a peddler, by mid-century he was a businessman, doctor, accountant, pharmacist or lawyer and by its end he would have been a professional (often salaried) in any one of a variety of fields. Although lagging behind the experience of Jewish men by some decades, the typical adult Jewish woman by 1990 was also a well-educated labor force participant, usually with some post-college training. In contrast to her mother or grandmother, she was less likely to be an unpaid worker in a family business (as her husband was less likely to have his own business) and more likely to be managing her own firm or developing a career as a salaried employee. Labor force participation rates of married Jewish women were high: in 1990, about 75 percent of those with no children at home were working, as were 75 percent of the married women with schoolage children and about half of those with very young (preschool) children.2 This article considers some of the most important implications for the American Jewish family of these changes in its economic context. Nearly a century after the period of mass immigration, most American Jews are at least one or two generations removed from their immigrant forebears. They live and work among non-Jews in a secular world where they expect to be respected for their

* Reprinted with permission from Studies in Contemporary Jewry 14 (1998), pp.65–80. (A symposium edited by Peter Y. Medding, Coping with Life and Death: Jewish Families in the Twentieth Century).

62

Economics of American Judaism

personal qualities and technical expertise without regard to their Jewishness. Earnings from their professional occupations place American Jews, and by extension the American Jewish community, comfortably in the upper middle class. The implications of this environment for American Jews’ consumption patterns, including investments related to family life in general and Jewish family life in particular, will first be discussed. Then follows an analysis of the effect of economic incentives on marriage, fertility and parenting, along with the consequences for American Jewish demographic patterns. The final section presents a brief summary of findings and some implications for the future of the American Jewish family.

Jewish consumption patterns Family, including the entire configuration of interpersonal relationships and consumption patterns understood by that phrase, is an economic “good” in that it is both desirable to have and costly to obtain.3 Yet by its nature, family life is not available for purchase; the marketplace provides only goods and services that are then used by family members to create shared experiences and consumption activities constituting the family “good.” Thus family life may be viewed as the “output” of a home-production process for which the “inputs” include the time and effort of family members as well as purchased goods and services.4 The home-production approach to family is well known among economists.5 In brief, the home-produced family “good” may be thought of as having an underlying “technology” (that is, production method) for combining purchased inputs with one’s own time and effort to yield the desired output.6 Moreover, the productivity of a given set of inputs is enhanced by “human capital,” by which is meant the entire spectrum of skills and prior experiences brought to bear on the process. For example, if regular dinners are used as a vehicle for building and sustaining the relationships that constitute the family good, their effectiveness is enhanced by a variety of skills associated not just with cooking but also with the social relationships themselves. Religion in general, and Judaism in particular, is another example of an economic good (that is, something both desirable and costly) that necessarily must be self-produced rather than purchased.7 Like family life, religious experience is an “output” obtained by combining purchased “inputs” (goods and services) with own-labor “inputs” (the consumer’s time and effort). A particular religion may be viewed as providing a set of “technologies” for producing religious experience, a context for the human capital (experiences and skills) specific to that religion. Jewish technologies would include the rules for observance of kashruth, Shabbat and brit milah, each of which infuses with religious meaning an otherwise secular activity. Where religious expression becomes intimately involved with the particulars of family life, as in the observance of holidays or life-cycle events, they may be viewed as jointly produced by a single set of activities. This underlying approach provides a framework for the present analysis of American Jewish families, where the

The economics of contemporary American Jewish family life

63

discussion focuses first on the time and money costs of this home-production process and then on productivity issues associated with human capital accumulation and changes in technology. Cost of family life The cost of family life includes not only the money spent on purchased goods and services, but also the value of time devoted to their consumption. Since consumers budget their time among many different activities, time is valued in terms of foregone opportunities; that is, the “opportunity cost” of time for one activity is its value if it had been allocated instead to its next best use. Whenever the value of an extra hour spent on producing the family “good” (or any other activity) is lower than its opportunity cost, the consumer would be better off by rearranging his schedule to spend more time on its best alternative use. Similarly, if an extra hour of family time is worth more than its opportunity cost, the consumer gains by spending more time on the family good. The most efficient allocation of time is where all possible gains have been realized by reallocating time from lower- to higher-valued uses. An important implication is that a consumer who budgets his or her time efficiently among all available activities will find that the marginal value of time (that is, the value of the least productive hour) is more or less the same for every activity. The value of marginal time may therefore be measured as its value in any arbitrarily selected activity. For an adult labor force participant, the earnings potential associated with an additional hour of work (conventionally measured as the wage rate) makes a convenient first approximation of the value of time spent in home-production or in any other leisure activity. Although the wage rate is a good first approximation, it generally understates the value of time for people making large investments in market-related human capital. For example, if students and new immigrants are willing to accept low-wage jobs in order to gain skills and experience, this does not reflect the high future wage rates that are part of the full “payment” for their work. Similarly, the full value of time for a housewife is not her actual wage rate (which is zero) but rather the value of her activities as home-producer of services within the family. Yet to the extent that such persons have access to market opportunities, the wage rate that they could be earning is an appropriate benchmark against which to measure the value of their time. With this important caveat, the value of time in both market and non-market activities varies across individuals according to the characteristics affecting their wage rates. If these wage rates differ markedly by gender and age, a corresponding division of labor in home production can enhance the efficiency of family resource utilization. Indeed, the within-family division of labor is often sustained by gender and age differences in the opportunity cost of time as they affect the efficiency of particular consumption patterns. The gains from such specialization need not derive from any special competence in an absolute sense, but only from the relative efficiency of family members with respect to each other. Nor need they be based on inherent characteristics; productivity differences can arise even among equally able

64

Economics of American Judaism

individuals who agree to specialize in different activities and so acquire different experiences and skills.8 Thus, the family-based roles assigned to various gender and age groups may vary across time and space with economic circumstances.9 Although available data are not adequate to establish the changing wage rates of American Jews, shifts in the occupational distribution of Jewish men reveal the broad patterns of their earning capabilities (see Table 6.1). Occupations classified as “laborers” are associated with the lowest wages, whereas the high-level “professions” and “managerial” occupations include those with the highest earnings. At the beginning of the twentieth century, when more than three quarters of all Jewish men were laborers and craftsmen, Jewish families were poor and their wage rates were among the lowest in the United States. By mid-century, only a small (and aging) fraction of all Jewish men were laborers, whereas the high-earning business and professional occupations had grown to be a large proportion of the total, especially for younger cohorts. This occupational transformation was very rapid, both in absolute terms and relative to the upward mobility of non-Jewish Americans. Jewish immigrants were investing heavily in American (secular) human capital during the early decades of the century, both directly in themselves and indirectly by educating their children for high-level occupations. The implicit value of this investment would have raised the value of their time substantially higher than their relatively low market wage. Subsequent rises in wage rates would reflect the value of these investments as immigrant Jews assimilated into the American economy, succeeded in business and settled into comfortable middle-class patterns of work and consumption. Throughout the second half of the twentieth century, Jewish families would be characterized by high market wages whether in comparison with their former selves, with Jews in their countries of origin, or with non-Jewish Americans as a group. Table 6.1 Occupation shifts over time: adult Jewish men Occupation group

1890

1900a

1910a

c.1948

1957

1970

c.1980

1990

Professions Managerial Subtotal Clerical Sales Subtotal Craft Otherb Subtotal

4.6 2.8 7.4 19.5 56.7 76.2 11.5 5.0 16.5

2.3 8.2 10.5 1.5 7.6 9.1 19.0 61.5 80.5

2.3 3.4 5.7 1.4 16.6 18.0 27.1 48.9 76.0

13.8 44.9 58.7 3.9 12.0 15.9 13.1 12.4 25.5

20.3 35.1 55.4 8.0 14.1 22.1 8.9 13.4 22.3

27.2 26.5 53.7 8.3 19.7 28.0 8.4 9.9 18.3

43.0 26.4 69.4 8.3 13.2 21.5 4.2 4.9 9.1

47.4 16.7 64.1 6.3 16.1 22.4 6.4 7.1 13.5

100.1

100.1

99.7

100.1

99.8

100.0

100.0

100.0

Total

Source: B. Chiswick, “The Occupational Attainment of American Jewry, 1890 to 1990: A Preliminary Report”; reprinted by permission of the author. Notes a Jews identified as foreign-born men of Russian origin. b Includes laborers.

The economics of contemporary American Jewish family life

65

The implications of high wage rates for Jewish family life in America are fundamental. While a high value of time discourages all consumption activities by raising their cost, it has a disproportionate effect on such time-intensive, home-produced goods as family and Jewish religious life. This wage effect differs from the implications of high family income, which encourages increased consumption of all goods, including “expensive” ones like family and religion. To the extent that high family income is associated with, or even derived from, high wages, such increases in consumption are typically accompanied by a search for less time-intensive (and thus relatively cheaper) home-production technologies. The imperative to “save” time effectively raises the value of anything that improves the efficiency of whatever time is still devoted to family consumption. One way of achieving this is to substitute purchased goods and services for time, raising the ratio of purchases relative to own-time input. For example, during the early years of upward economic mobility, Jewish consumers became an eager market for kosher prepared foods, whether in packages (cans, bottles or boxes) or from counters (delicatessen or “appetizing” stores).10 High-wage American Jews also developed an extensive system of schools, synagogues, camps and community centers for expressing their Judaism and for the Jewish education of their children, a system that makes much heavier demands on their pocketbooks than on their time budgets. Changes in consumption that systematically raise the ratio of purchases to own time are often referred to as a substitution of the “quality” of time for its “quantity.” In this usage, a higher “quality” refers to the well-being achieved from a given expenditure of time, presumably accomplished by purchasing more or better goods and services. Whether or not this constitutes an improvement in the consumer’s overall lot depends on the effectiveness of the new consumption pattern. Indeed, the notion of “quality” associated with these quantity–quality trade-offs is that alternative means can be used to achieve the same goal, so that a “quality-intensive” consumption pattern would be preferred to a “quantity-intensive” pattern only in those cases where time is relatively expensive. Time quantity–quality substitutions in consumption are widely observed and are a stable characteristic of high-wage American Jews.11 Sometimes the phenomenon is lamented, as when “consumerism” and “materialism” are viewed as poor substitutes for the time family members might otherwise spend together. Yet sometimes it is lauded, as when high expenditures on child care, health, education or leisure activities are seen as expressions of caring and solid family values. Regardless of the point of view, however, goods-intensive consumption patterns are so pervasive in the high-wage American Jewish community that they are often associated with Americanization itself. Family human capital For given inputs of time and money, the quality of family life (that is, the efficiency with which the family “good” is produced) depends greatly on the skill and experience of its members. Many such skills have value in other activities as

66

Economics of American Judaism

well and are best viewed as part of an individual’s general human capital. Yet there is an important group of acquired skills and prior experiences for which the sole benefit is that they enhance relationships associated with marriage and family. Such skills are “family-specific” in that they are specialized for home production of the family good and do not contribute to productivity in other activities.12 Marriage improves the efficiency of each partner in home-production activities associated with the family good. It also provides security that enhances the rate of return to investment in human capital specific to a particular set of family members. Some of these family-specific skills are general, arising simply from a shared consumption pattern (for example, skill in preparing meals at home).13 Others are associated with the mutual knowledge and caring within the family and grow out of the intimacy of ordinary family life.14 Jewish religious ideals of family emphasize such commitments: to be a life companion (helpmeet) for one’s spouse; to nurture and educate children; to honor one’s parents; and to care for the sick, the widow and the orphan. Since various types of human capital are mutually complementary they tend to be highly correlated with each other, and people with high education levels tend to invest more in family-related skills.15 In effect, a higher level of one productive attribute (for example, health) improves the productivity of another (for example, education) and thus raises the rate of return to human capital investments generally. The very high level of secular education among American Jews thus provides a strong economic incentive for them to invest in family-specific human capital. This in turn raises the productivity of their family time and offsets (at least partially) those incentives to reduce time-intensive family activities. The positive relationship between education and family skills is sometimes obscured by the low time-intensity of consumption patterns among the highly educated, as high wage rates also alter the optimal composition of skills in ways that affect the very nature of family life. For example, the convergence of male and female wage rates in the United States has greatly reduced economic incentives for a household division of labor between Jewish husbands and wives. By the end of the twentieth century, the kitchen skills of American women are much less timeintensive than those that are still nostalgically associated (perhaps fantasized) with Jewish motherhood. Similarly, Jewish fathers are more likely than their immigrant forebears to participate in day-to-day chores of food preparation and parenting. Even the process of skill acquisition is affected: instead of the relatively time-intensive learning-by-helping methods of an earlier era, American Jews rely heavily on a wide variety of purchased materials (such as books, manuals, classes or professional counseling services) to learn how to carry out mundane home-production activities (such as raising children, preparing foods or tending to illness or infirmity). Analogous changes are evident in the Jewish practices of American families. In an environment where time-intensive activities are relatively costly and purchased inputs are correspondingly cheap, popular Judaism (including secular Jewish culture as well as religion per se) has exchanged the time-intensive customs of Eastern Europe in favor of typically goods-intensive expressions. Indeed, the pervasiveness of this “Americanization” has effectively produced a new Jewish

The economics of contemporary American Jewish family life

67

subculture that differs markedly from its immigrant origins in such fundamentals as language, cuisine and daily rhythms of family life.16 The Jewish quality of family life is also affected by the Jewish human capital of its members – skills that may have been acquired through Jewish education (formal or informal) and previous Jewish experiences in family, synagogue or community.17 Like secular education, religious skills can be highly complementary with other forms of human capital, whether general or family-specific. Indeed, the complementarity between Jewish human capital and family human capital is especially strong for the many religious observances inextricably entwined in the particulars of family life: life-cycle celebrations, holiday observances and practices associated with kashruth. Yet the acquisition of Jewish experience and skills is itself a time-intensive process, very costly in an economic environment where it must compete for time with many attractive alternatives. Strategies for responding to this fundamental problem take one of two basic approaches: Jewish lifestyles can focus on practices that avoid costly investments in Jewish human capital or, alternatively, they can innovate “new” forms of Jewish human capital that are complementary to high levels of secular investment. Both of these strategies are evident in the American Jewish community.18 For example, combining English with Hebrew in the rituals of home and synagogue facilitates participation by persons with only a basic familiarity with the Hebrew language, thus avoiding the need to make the relatively large investments that true Hebrew fluency requires. American Jewish schools (usually called “Hebrew schools” because of the importance of language in their curriculum) have adopted institutional structures and teaching methods that complement (and are complemented by) the secular schooling received by American Jews. Even so, the curriculum of Jewish schools varies widely in Jewish-specific content: although some schools view Judaism as a culture whose language, literature and history is infused with religious meaning, others approach it as a universal ethical system that requires few skills not shared by non-Jewish neighbors. Jewish lifestyles adapted to low investments in specifically Jewish forms of human capital are especially attractive for families in which parents and grandparents themselves have followed this strategy. Partly as a consequence of rapid upward mobility during the first half of the twentieth century, a large segment of late twentieth-century American Jewry is characterized by very low levels of Jewish human capital.19 Whatever its cause, however, a human capital “portfolio” combining high levels of secular skill with low levels of Jewish skill is inherently unstable, insofar as it means that the value of time spent in Jewish observance is less “productive” at the margin than time spent in secular activities. In effect, it provides an incentive to further reduce the time allocated to Jewish observance and the Jewish content of family life, which in turn reduces the incentive to invest in Jewish-specific forms of human capital. While many family-based traditions have difficulty competing for the time of high-wage American Jews, others effectively combine Jewish time with family time while enhancing the quality of both. Some of these traditions, like Shabbat

68

Economics of American Judaism

dinner or the Passover seder, have been practiced for centuries. Others are new, like the family-oriented bar/bat mitzvah ceremony with its attendant wedding-like celebration, or various synagogue traditions in which families participate together. A blending of Jewish religious observance with family life enhances the mutual complementarity, and thus increases the efficiency, of two very time-intensive activities. American Jews are especially receptive to innovations in Jewish practice that accomplish this and are often willing to invest in the corresponding forms of Jewish human capital. Thus the high value of time, and the quality–quantity tradeoffs that it induces, affects both the very nature of Jewish human capital and the Jewish quality of family life. Along with American Jews’ occupational stabilization at high levels during the second half of the twentieth century has come the development of a variety of American Jewish institutions designed to complement the scarce time of Jewish families. Jewish camps, schools and community centers enable parents to purchase substitutes for their own time, thereby raising the goods-intensity of family activities. Synagogues and havurot often sponsor family events for Shabbat or holidays that provide relief from logistical duties as well as a shared social activity. Synagogue attendance itself has become a family activity in the United States, and synagogues have adapted to this phenomenon not only by mixed seating but also by distinctively American innovations that give the entire family a role in the religious service.

Family formation and life cycles For many American couples, including Jews, the most time-intensive non-work activity for which a family must budget is child-rearing (that is, parenting). The extended education and investments associated with launching a highwage career raise the cost of starting a family at a young age, often making it more efficient to establish career before family rather than the reverse. High wage rates (especially for women) also raise the cost of having many children. These incentives are consistent with an observed pattern of later marriages, fewer children, and an extended period of financially independent single adulthood.20 Family human capital and marriage Since individuals differ greatly in their preferences and aspirations for family life, the magnitude of the gain from marriage depends on the sorting of partners (whether by themselves or by helpful matchmakers) into mutually compatible couples. The conventional economic model views the marriage market as a search process that has costs but also yields benefits in the form of a potential marriage partner. Each person entering the marriage market is viewed as knowing (more or less accurately) his or her own characteristics and those of an “ideal” partner. Since any potential partner revealed by the search process inevitably falls short of this ideal, the searcher must decide whether to accept a

The economics of contemporary American Jewish family life

69

given match or else continue looking; the outcome depends on whether the marginal benefit of additional search (finding a “better” partner) is likely to outweigh the additional cost. Matches occur when each partner decides that the other is “optimal,” in the sense that additional search would cost more than the potential gain.21 If the economic basis of marriage is mutual productivity of the two partners, the multidimensional nature of consumption goals (as well as individual differences in tastes and preferences) make the selection of marriage partners especially complex. Yet whenever human capital raises productivity in some activity, it thereby enhances a person’s desirability as a marriage partner. One implication of the economic theory of search is that the optimal sort (that is, the pairing that occurs if each person chooses his or her “optimal” partner) tends to match persons with similar levels of human capital.22 Highly educated men and women thus tend to marry each other and, conversely, men and women with relatively little schooling also tend to pair together.23 Economic incentives affecting marital search match couples not only by secular education and career aspirations but also by the amount and content of their religious human capital. Complementarity between various types of human capital militates in favor of religiously homogamous families, especially for those who understand their Judaism in terms of particularistic Jewish knowledge and experiences. In contrast, those who prefer to focus their religious aspirations on general (for example, ethical) values shared by many Americans make few investments in specifically Jewish human capital and hence have correspondingly less to gain from the Jewishness per se of a potential marriage partner. These human capital considerations are closely related to the “exclusivist–ecumenical” continuum along which Protestant denominations are sometimes ranked: human capital specific to Judaism is “exclusivist” insofar as it serves to differentiate members of the group from nonmembers, whereas the more general forms of Jewish human capital are “ecumenical” since they do not promote such a distinction.24 While Jewish “exclusivism” in this sense may be stronger among the Orthodox in comparison with the other synagogue movements, it is frequently evident among the non-Orthodox as well. Similarly, there is some degree of Jewish “ecumenism” in all American synagogue movements, although its most hospitable environment is among the Reform. While there tends to be a positive correlation between the level of investment in Jewish human capital and the specificity of its Jewish content, within-group variations in Jewish education make the correlation across synagogue movements less than perfect. Among American Jews, the religious compatibility of a potential marriage partner depends to a crucial extent on the relevant concept of Jewish human capital. From this perspective, the extraordinarily high outmarriage rates among American Jews derive not so much from the American fondness for innovation in Jewish practice but rather from the extremely low specificity of Jewish human capital with which so many (but not nearly all) of these innovations are associated. Table 6.2 presents the distribution of American Jews by affiliation

70

Economics of American Judaism

Table 6.2 Outmarriage rates by denomination raised (first spouse of ever-married Jews-by-birth) Alla

Denomination raised Size (%) All Jews-by-birth Orthodox and Traditional Conservative, Reconstructionist and “just Jewish” Mixed Jewishb Reform Secular, miscellaneous, and no religion Non-Jewishc Sample size

Under age 65 Spouse not Jewish (%)

Size (%)

Spouse not Jewish (%)

100 24

25 10

100 19

32 15

39

22

42

29

3 26 3

21 35 42

3 28 3

33 41 45

5 2,282

66 2,282

5 1,720

68 1,720

Source: 1990 National Jewish Population Survey (household weights). Notes a Includes all Jews-by-birth ever married by 1990. b Persons raised as both Orthodox and Conservative, both Orthodox and Reform, or both Conservative and Reform. c Jews-by-birth raised as non-Jews, including those who were raised as “both” Jews and non-Jews.

with the various synagogue movements along with the outmarriage rates (the proportion whose first marriage was to a non-Jewish spouse) for each group, both for all ever-married adults and for those under age sixty-five. Since human capital and marital decisions were somewhat different for immigrants than for those born in the United States, the figures for persons under age sixty-five are the most indicative of the American Jewish experience. Table 6.2 ranks the main branches of American Judaism by the relative intensity of their Jewish-specific human capital. The Orthodox tradition emphasizes forms of family-related human capital most specific to Judaism and generates higher benefits to homogamous couples. The outmarriage rate of 15 percent among the Orthodox (who account for 19 percent of American Jewry) is indeed the lowest of all groups identified here.25 The Conservative movement, which seeks a balance between Jewish-specific human capital and secular lifestyles, is characterized by an intermediate outmarriage rate of 29 percent and accounts for 42 percent of American Jewry. The Reform movement, with its focus on Jewish beliefs and practices shared by many nonJewish Americans, is marked by a higher outmarriage rate of 41 percent.26 This is close to the 45 percent outmarriage rate among persons raised with “no” religion, though not nearly as high as the 68 percent rate for persons born Jewish but raised in other religions.

The economics of contemporary American Jewish family life

71

Jewish family life cycles The high schooling level characteristic of American Jews generally militates against marriage at young ages. Delayed marriage may be the consequence of early human capital investments made by young adults launching high-level careers, causing them to postpone heavy family-specific investments until later. Full-time schooling that extends into early adulthood also delays the availability of information relevant for marital search: career choices may not stabilize until relatively late, and important adult characteristics may not be revealed (either to oneself or to a potential partner) until after labor force entry and the acceptance of financial responsibility. Early marriages based on incomplete information tend to be unstable; indeed, early age at marriage is one of the strongest and most robust predictors of subsequent divorce. Overall, it is generally optimal for the highly educated to delay family formation until well into adulthood.27 The marital status of American Jews in 1990 (see Table 6.3) thus reflects their education and earning levels. American Jewish men and women remain single until their mid-twenties, the typical age of first marriage being about twenty-six years for men and twenty-four years for women.28 Somewhat earlier marriage ages are observed for cohorts born during the Great Depression and the Second World War (men aged fifty to fifty-nine and women aged forty-five to fifty-nine in 1990 who would have entered adulthood during the 1950s). These “baby boom” parents were presumably influenced by an exceptional set of economic circumstances, but apart from them, the pattern seems to have been fairly stable throughout the century. Even in the twenty-five to thirty-four age cohorts (where exclusion from the sample of those who have yet to marry at age thirty-five or older lowers the Table 6.3 Marital status by age and sex Age in 1990

25–29 30–34 35–39 40–44 45–49 50–54 55–59 60–64 ≥65 All ages

Percentage of all adult Jews

10 11 12 12 9 6 7 7 27 100

Age at first marriagea

Percentage distribution Never married

Married

Previously married b

Men

Women

Men

Women

Men

Women

Men

Women

24.4 26.0 26.2 26.3 26.3 24.6 25.9 26.5 26.9 26.2

22.8 23.4 24.6 24.5 21.8 21.2 21.9 22.7 24.3 23.4

65 34 17 15 7 12 8 4 3 17

39 24 11 12 8 7 1 3 2 11

34 60 72 74 78 77 85 90 82 72

53 69 75 75 78 74 74 80 57 68

1 6 11 11 16 11 8 6 15 10

8 7 14 13 14 19 25 18 41 21

Source: 1990 National Jewish Population Survey (Jews-by-birth aged 25 and older). Notes a Mean age at first marriage for ever-married persons. b Marital status in 1990 was divorced, separated, or widowed.

72

Economics of American Judaism

average age at first marriage), Jewish women remained single until well over the age of twenty-three. Among those in their late twenties (ages twenty-five to twenty-nine), married couples accounted for only one-third of the men and just over half of the women, while 65 percent of the men and 39 percent of the women in this age group were still single (never married). Among those aged thirty to thirty-four, the never-married accounted for a third of the Jewish men and a fourth of the women. In contrast, some three-quarters of the men and women aged thirty-five to sixty-four in 1990 were married, and the rest were more likely than not to have been previously married.29 If a stable marriage encourages investment in family-related human capital, American Jewish couples generally view children as ipso facto enhancing the quality of family time.30 Yet raising a child is intrinsically time-intensive, and high wages make it expensive to have many children. Thus, high-earning couples tend to have smaller families than do couples whose time is less costly. Yet highearning couples also have more income and typically spend more on purchased goods and services for each child. In analogy to the substitution of quality for quantity in family time, this pattern is often described as a trade-off between the quantity and “quality” of children.31 Much of the observed decline in American Jewish birth rates is the consequence of this quantity–quality trade-off and is shared by other high-wage American groups. Evidence from the 1990 childbearing histories of American Jewish women of various ages suggests that their birth rates may have stabilized at an average of two children per woman (see Table 6.4). The exceptional economic circumstances of the forty-five to fifty-nine age cohorts are reflected here by their low rates of childlessness and relatively large number of children, a Jewish “baby boom” in the 1950s that nevertheless raised the average to no more than 2.76 children. In contrast, the average number of children born to Jewish mothers over age sixty-five in 1990 was only 2.25. While Jewish birth rates have clearly declined over time, family size appears to be fairly stable in recent decades, averaging about two children per woman. If observed birth rates appear to be somewhat lower than this, much of the difference may be attributable to the patterns of delayed marriage and childbearing that were discussed earlier. For example, the first two columns of Table 6.4 indicate that fully 24 percent of all adult Jewish women are childless, yet the age distribution suggests that young women may be delaying rather than avoiding motherhood. Similarly, childlessness among married women is partly due to the recentness of their first marriage (at age twenty-six, compared to age twentythree for women with children) and partly to the relative instability of young marriages, which is itself an incentive to postpone child-bearing. Although high-wage families with few children typically spend more resources per child than their low-wage counterparts, the selection of expenditure patterns will vary with parental goals. As it is the adults who ultimately control a family’s resource allocation decisions, it is they who determine the balance between parental sacrifice and self-indulgence within the family. American Jews are typically willing to “sacrifice” their own consumption in favor of their children’s

The economics of contemporary American Jewish family life

73

Table 6.4 Marital fertility by age (born-Jewish adult women) Age in 1990

Childless women (percent of all women)

Ever-married women Age at first marriage (mean)

25–29 30–34 35–39 40–44 45–49 50–54 55–59 60–64 ≥65 All ages

Children ever born (mean)

Never married

Ever married

Childless women

Mothersa

All women

Mothersa

39 24 11 12 8 7 1 3 2 11

35 16 14 11 11 9 3 8 11 13

23.5 25.6 27.7 30.2

21.9 22.9 24.1 23.5 21.5 20.6 22.0 21.9 23.7 22.9

0.41 1.20 1.48 1.61 1.89 2.14 2.65 2.17 1.98 1.55

1.59 1.99 1.99 2.08 2.32 2.56 2.76 2.44 2.26 2.25

b b b b

28.8 26.2

Source: 1990 National Jewish Population Survey (Jews-by-birth aged twenty-five and older). Notes a Women with children ever born. b Fewer than twelve women in sample.

health and education.32 Yet both of these items are not just consumption; they are important forms of investment in human capital that may be understood as a bequest, transmitting high-level skills from parents to children. Apart from satisfying parental goals for their children, this understanding of the nature of child “quality” underlies intergenerational stability of the high-wage occupational structure characteristic of American Jewry. The opportunity cost of a child’s time is determined not by his or her current wage rate (which is typically very low or negligible) but rather by the value of his or her investments in human capital. Thus, heavy investments in child “quality” raise the value of children’s time relative to that of their parents, providing an incentive for high-wage Jewish parents to enhance the quality of time for their children. Not only do American Jewish parents hire service providers to relieve their children (and themselves) of household chores, they also spend much of their valuable leisure time enhancing their children’s participation in a wide variety of broadly defined educational activities, frequently driving them from one to the other and supporting them in behind-the-scene parent groups. The high-wage demographic patterns of American Jews (especially the late marriages and small families) also have communal implications. American Jewry is characterized by relatively few children and an unprecedentedly high proportion of never-married adults. Middle-aged Jewish adults are more likely than ever before to be caring for young children, while somewhat older “emptynesters” (usually the parents of single adults) have emerged as a significant demographic group. The age gap between children and their grandparents is

74

Economics of American Judaism

larger than ever before, and while improved health and increased longevity extend the active lifespan of these grandparents, they also increase the cohort of “very aged” Jews.33 The demographic patterns that emerge as Jewish families adapt to their highwage economic opportunities further alter the environment in which American Judaism is shaped. For example, Jewish families with only one or two children have a high incidence of same-sex siblings and hence of families with only daughters.34 As these parents seek valid religious expression in the absence of male offspring, they become an important constituency for egalitarianism in all dimensions of American Jewish life. Similarly, the relatively high number of one-child families leads invariably to an increasing proportion of one-grandchild families: that is, of families in which a child has neither siblings, cousins, aunts nor uncles and is the sole descendant of four (presumably doting but inevitably aging) grandparents. Such families become a constituency for revisions in the balance between Jewish home and community, as when unrelated families join forces for a Passover seder, when Shabbat and holiday meals are shared in the synagogue, or when Jewish schools and youth groups organize intergenerational activities with unrelated “grandparents.”

Conclusion The basic approach of this analysis has been to view family and religion as two home-produced goods, potentially interrelated, that require as inputs both time and money. To the extent that high-wage occupations are characteristic of American Jewry, the community is one in which time has a high value and time-intensive consumption patterns are correspondingly costly. This fundamental fact underlies much of the American impulse to innovate new Jewish “traditions,” an impulse that often distinguishes contemporary American Jews from both their immigrant forebears and, at least to some extent, from other branches of world Jewry. The underpinning of the high-wage economic environment of American Jewry is an extremely high level of secular education, a heavy investment in workrelated human capital, for both men and women, that for many is an identifying characteristic of this community. This has important implications for American Judaism as well, for while Jewish and secular education must compete with each other for the resources (especially time) of American youth, complementarities between the two types of education increase the productivity of investments in Jewish human capital. Not surprisingly, American Jewish education tends to focus on skills best suited to a community in which secular skills are high, time is costly and goods are relatively cheap. As in most communities where high wages are the norm, families tend to be small. American Jews marry relatively late and spend generously on their few children, boys and girls alike. Heavy investments in the health and education of these children are typically a matter of course, an expectation (for both adults and children) associated with the essence of family and communal life. The consequent social and demographic patterns have established themselves as

The economics of contemporary American Jewish family life

75

economically successful, intergenerationally stable, and hence enduring characteristics of American Jewish family life. The high cost of time also underlies some of the apparent paradoxes in American Judaism. If high-wage men and women spend little time at home, they nevertheless devote much attention to their children and invest heavily in familyrelated skills. If the incentives of educated Jews are unfavorable to traditional religious observance, they nevertheless favor such new forms of Jewish education as the study – in English – of Jewish history, literature and social science. They also favor the development of new adaptations to the economic environment. Thus even as Americans seem to distance themselves from the large families and family-based religious observance associated with their Jewish heritage, they have been prolific in the development of religious institutions and lifestyles that raise the quality of Jewish family life in the United States. This article has examined some of the ways in which the American Jewish family, and Jewish family life in America, have been influenced by their economic environment. The broad outlines of this economic influence provide a useful perspective on the Jewish family in its American context. This in turn yields insights into the historical process of Jewish assimilation into the highwage subculture of professionals in the United States. It will presumably also yield insight into the future of world Jewry, as more countries (including Israel) enter the orbit of modern economic development.

Notes 1 Two major new sources of data shed light on the economic transformation of the American Jewish community during the course of the twentieth century. Data on selected economic variables for American Jews and non-Jews, by decade from 1890 to 1990, have been developed from various census and survey sources and are now available for statistical analysis; see Barry R. Chiswick, “The Occupational Attainment of American Jewry, 1890 to 1990: A Preliminary Report” (unpublished manuscript, Nov. 1994). In addition, the 1990 National Jewish Population Survey (NJPS) contains a wealth of information on the social and demographic characteristics of American Jews in 1990; see Sydney Goldstein, “Profile of American Jewry: Insights from the 1990 National Jewish Population Survey,” American Jewish Yearbook 92 (New York and Philadelphia: 1992), 77–173. These two complementary sources permit a more complete analysis of the economic transformation of twentieth-century American Jewry. Also see two previous studies by Barry R. Chiswick, “The Labor Market Status of American Jews: Patterns and Determinants,” American Jewish Yearbook 85 (New York and Philadelphia: 1984), 131–153 and “The Postwar Economy of American Jews,” in Studies in Contemporary Jewry, vol. 8, A New Jewry? America Since the Second World War, ed. Peter Y. Medding (New York: 1992), 85–101; and Carmel U. Chiswick, “The Economics of American Judaism,” Shofar 13, no. 4 (1995), 1–19. 2 Ibid. (Carmel U. Chiswick). 3 Some people do not view family life as desirable, just as there are some people who do not like ice cream. Since their presence in the American Jewish community does not affect the present analysis, this group will be ignored here. 4 One implication of this approach is a blurring of the distinction between production and consumption for self-produced goods. Indeed, the general topic is sometimes referred to as “production in consumption.”

76

Economics of American Judaism

5 See, for example, Gary S. Becker, A Treatise on the Family (Cambridge, Mass: 1981); and T. Paul Schultz, “Symposium on Investments in Women’s Human Capital and Development,” Journal of Human Resources 28 (1993), 689–974. 6 See Becker, A Treatise on the Family. 7 See Corry Azzi and Ronald Ehrenberg, “Household Allocation of Time and Church Attendance,” Journal of Political Economy 83 (1975), 27–56; Laurence R. Iannaccone, “A Formal Model of Church and Sect,” American Journal of Sociology 94 (suppl.), S241–S268; and Chiswick, “Economics of American Judaism.” 8 For example, if two equally productive people agree to specialize, one in market work and the other in home production, and each invests in skills best suited to their respective job, their productivity would then differ in each type of work. 9 See Chiswick, “Economics of American Judaism.” 10 Although Jewish women often withdrew from the labor force during the first half of the twentieth century, they increasingly entered (often as volunteers) the educational and communal occupations that Jewish men were leaving for more lucrative activities. Their high time-value behavior reflected the importance placed on these activities by American Jews. 11 See Jenna Weissman Joselit, The Wonders of America: Reinventing Jewish Culture, 1880–1950 (New York: 1994). 12 These skills are commonly referred to in the literature (primarily on the economics of marriage and divorce) as “marriage-specific,” to distinguish them from “marketspecific” skills. Since the marriage relationship is only one aspect of family life, however, they will be referred to here as “family-specific” skills. 13 Other efficiencies associated with marriage result from economies of scale; for example, housing or meals may be less expensive (per person) if shared. Gains of this sort tend not to be family-specific in that they are observed both before and after a divorce-and-remarriage sequence. Indeed, many of these gains are enjoyed by roommates or various other group living units and are not unique to the family per se. 14 See Carmel U. Chiswick and Evelyn L. Lehrer, “Religious Intermarriage: An Economic Perspective,” Contemporary Jewry 12 (Jerusalem: 1992), 21–34. 15 See Robert T. Michael, “Education in Nonmarket Production,” Journal of Political Economy 83 (1973), 306–327. 16 See Chiswick, “Economics of American Judaism,” and Joselit, Wonders of America. 17 See Azzi and Ehrenberg, “Household Allocation of Time and Church Attendance,” and Laurence R. Iannaccone, “Religious Practice: A Human Capital Approach,” Journal of the Scientific Study of Religion 29 (1990), 297–314. 18 Jack Wertheimer documents this tendency in his excellent discussion of “Popular Religion: Apathy and Renewal” in his A People Divided: Judaism in Contemporary America (New York: 1993), ch. 6. 19 Following economic incentives that led them to focus on secular achievement, many American Jewish immigrants made relatively small investments in their children’s Jewish education. Moreover, the Jewish skills acquired by these children were often imperfectly adapted to the high-schooling, high-wage suburban environment in which they would find themselves as adults. See Carmel U. Chiswick, “The Economics of Jewish Immigrants and Judaism in the United States,” Papers in Jewish Demography 1997, pp. 331–344. 20 This pattern is generally shared by all high-wage American religious and ethnic groups. It has been documented for American Jews by data from the 1990 NJPS. 21 This discussion of the economics of marriage and family is based on a vast literature. The theory is concisely and elegantly presented in Becker’s Treatise on the Family, which includes an extensive bibliography, and has been applied elsewhere by many researchers (see, for example, Chiswick and Lehrer, “Religious Intermarriage”; and Evelyn L. Lehrer and Carmel U. Chiswick, “Religion as a Determinant of Marital Stability,” Demography 30, no. 3 [1993], 385–404). 22 This occurs because a person with higher levels of any attractive characteristic (for example, schooling) is more likely to be accepted by a “better” potential partner and is

The economics of contemporary American Jewish family life

23 24 25

26 27

28 29 30

31

32

33

34

77

thus more likely to benefit from additional search. It follows that he or she is less likely to agree to marry a partner with less attractive characteristics. See Becker, A Treatise on the Family. See Dean M. Kelley, Why Conservative Churches are Growing: A Study in Sociology of Religion (New York: 1972). The fraction of American Jews raised as Orthodox is substantially higher than the fraction currently identifying as such. This oft-noted “denominational drift” is a consequence of the economic assimilation of immigrants as well as the growth of nonOrthodox American synagogue movements. As the movement most hospitable to those who view themselves as Jewishly “marginal” (for whatever reason), outmarried Jews are most likely to be affiliated with Reform synagogues. Sexual maturity is not subject to the same economic incentives as marriage and family formation, leading to a potential difficulty among young adults. One “solution” is a pattern of informal marriage (cohabitation) among young adults prior to formal marriage with a life partner. Another is a serial marriage pattern where an early pairing (preferably childless) is followed by divorce and subsequent remarriage in a more enduring relationship. The mean age of first marriage reported in Table 6.3 is slightly lower than this because incomplete marital histories, especially in the youngest cohorts, exclude many who will marry later. Higher rates of being currently married among men over age fifty-five reflect the longer life expectancy of Jewish women, among whom the incidence of widowhood increases correspondingly in older cohorts. This perception is not specific to Jews but rather a generally shared value for nearly every society. Judaism reinforces the desire for children with its emphasis on parent–child relationships, both in specific religious observances and in an obligation to contribute to intergenerational communal survival. The term “child quality” is conventional in the literature, although perhaps unfortunate since it refers not so much to the child as to parental aspirations for the child. The presumption is that parents allocate family resources to their children’s consumption precisely because they view such expenditures as quality-enhancing. Emphasis on education is not unique to Jews, but neither is it universal among high-wage groups. Some groups, for example, tend to place a greater value on attending a socially prestigious college than on education per se. Others place more emphasis on opportunities for their children to have “fun,” to lead a fashionable lifestyle or to carry on a family business. The emerging phenomenon of four-generation families is also of some importance. Fourgeneration families arise from the juxtaposition of longer life expectancy with relatively early childbearing for two or more generations of women, a condition that characterized the somewhat exceptional “baby-boom” cohorts and their mothers. Thus, the fourgeneration Jewish family should probably be viewed as a delayed consequence of the transition to later childbearing rather than as an enduring feature of the American Jewish family. An equal probability for each sex implies that exclusively female children can be expected in 50 percent of the one-child families, 25 percent of the two-child families, and 13 percent of the three-child families. To understand the implications of this, consider that most American Jewish families have two children and that most of the remaining families have only one child. This means that all-daughter families are somewhere between 25 and 50 percent of the total, tending toward the higher end of this range as the incidence of one-child families becomes greater.

7

Determinants of religious intermarriage* Are Jews really different?

Much is being written about the near-epidemic rate of religious outmarriage among American Jews. According to the 1990 National Jewish Population Survey (NJPS), fully 26 percent of all ever-married Jews-by-birth selected non-Jewish partners for their first marriage. The secular trend is clear: whereas only 9 percent of those who first married prior to 1950 had non-Jewish partners, more than half of those first married since 1980 have outmarried (Table 7.1). Moreover, despite minor differences in some decades, Jewish men and women appear equally likely to marry non-Jewish partners. This paper is devoted to improving our understanding of the environment within which American Jews make their marital choice decisions, focussing on the relationship between Jewish outmarriage and marital stability. The first part develops those aspects of the economic theory of marriage that effect religious intermarriage. The second part places the Jewish experience in the context of Table 7.1 Outmarriage rate among American Jews, 1990a Year of first marriage

Total Before 1950 1950–1959 1960–1969 1970–1979 1980–1985 1986–1990 Sample size

Percent outmarried All

Men

Women

26 9 12 20 40 49 55 2197

27 10 14 21 38 45 55 1074

25 8 11 19 43 52 54 1123

Source: 1990 National Jewish Population Survey (household weights). Note a Percent of all ever-married Jews-by-birth whose first spouse was not Jewish (by religion) at the time of marriage. * Reprinted with permission from Papers in Jewish Demography 1993, pp. 247–257.

Determinants of religious intermarriage: are Jews really different?

79

American religious pluralism, summarizing the evidence for other American religions and considering ecumenism as a factor in Jewish outmarriage. The third part concludes with a summary of findings and their implications for the American Jewish community.

Priorities and Tradeoffs in Marital Search1 In late twentieth-century United States, marriage is best viewed as a partnership contracted only if both parties expect to benefit, and readily dissolved if either party revises that expectation (Becker, 1991). Each individual is characterized by a bundle of attributes, and the overall quality of a marriage depends on the match between the two partners with respect to the entire package of characteristics. Marital instability is more likely when traits are mismatched (presumably the outcome of an inefficient search), in part because the efficiency gains from marriage are low and in part because there are more potential partners who might present a better alternative. To the extent that the optimal pairing involves tradeoffs, however, a poor match on any one trait may be compensated by a very good match on other traits and need not imply a poor match overall. The greater the number of important marital traits, the greater the likelihood that a successful pairing will involve a mismatch on any single trait viewed in isolation. An ideal pairing matches partners with similar values of traits whenever similarity between spouses enhances efficiency in achieving marital goals. Since marital goals associated with religion in general, and Judaism in particular, are achieved more efficiently by spouses whose religious beliefs and practices are similar to each other, Jews should prefer (other things the same) to marry other Jews. If so, individual Jews would view religious outmarriage as a compromise rather than a goal of the marital search. Although historically outmarriage may have provided an escape from antisemitism, an explicit rejection of Judaism, or even an expression of Jewish self-hatred, the fact that some 80 percent of the intermarried Jews-by-birth identified in the NJPS sample (and 90 percent of those married since 1980) continue to self-identify as Jews after marriage suggest that these are not primary motives for outmarriage in this population. Outmarriage is also more likely to occur among individuals who place a low priority on religion as a marital trait, an effect likely to be greater the more complex the sort. Secularization, in the sense of reduced religiosity and weakened commitment of individuals to their own religious community, is sometimes attributed to the extensive religious pluralism that prevails in American society. Yet an important recent study suggests that pluralism leads to increased private religious practice; Americans seem to place relatively more importance on religion per se, and on religious observance, than do their counterparts in countries which are more religiously homogeneous (Iannaccone, 1991). The absence of a state monopoly and competition among religions in America tends to increase the responsiveness of religious groups to individual preferences, enhancing the variety as well as the degree of religious expression (Warner, 1993).

80

Economics of American Judaism

This suggests that assimilation in America is best viewed as a consequence rather than the goal which motivates religious outmarriage. Although rising divorce rates among non-Jewish Americans have led to a social environment increasingly tolerant of (if not actually friendly toward) marital dissolution, divorce is still sufficiently costly to be a disincentive for high-risk marriage. To assess the instability associated with Jewish outmarriage, Table 7.2 reports the percent of all ever-married Jews-by-birth whose first marriage ended in divorce before the end of the tenth year.2 The patterns for men and women appear to be quite similar, although for most cohorts the divorce rates were somewhat higher for women than for men. Among the inmarried, these first-marriage tenth-year divorce rates rose from 2 percent for those married prior to 1950 to 12 percent for those married in the 1970s. Among the outmarried, tenth-year divorce rates rose from 4 percent for the earlier cohort (prior to 1950) to about 14 percent for the cohort married in the 1970s.3 Although these figures indicate that Jewish outmarriage is generally less stable than inmarriage, the incentive for young Jews to choose same-faith partners has been eroded over time by persistent increases in marital instability among Jewish inmarrieds. Persons first married prior to 1950 were twice as likely to divorce within ten years if their spouses were not Jewish (4 percent as compared to 2 percent), whereas among those married in the 1970s the likelihood of divorce by the tenth year was only 37 percent higher for outmarrieds (14 percent as compared to 11 percent). The comparison is particularly dramatic among women, for whom inmarriage divorce rates have increased six-fold while outmarriage divorce rates have merely doubled. The story of increasing Jewish outmarriage must therefore be told within the context of declining Jewish marital stability. Although divorce rates are higher Table 7.2 Stability of first marriages among American Jews, 1990a Tenth-year divorce ratesb (percent)

Year of first marriage All

All Cohorts: Before 1950 1950–1959 1960–1969 1970–1979 Sample size

6 2 3 9 12 1599

Inmarried Jews

Outmarried Jews

All

Men

Women

All

Men

Women

5 2 2 8 11 1322

5 3 2 6 9 619

5 2 3 10 12 703

10 4 8 11 14 254

11 (1) (15) 12 13 132

10 7 (0) 9 14 122

Source: 1990 National Jewish Population Survey (household weights). Notes a All ever-married Jews-by-birth. b Percent of first marriages which had ended in divorce before the end of their tenth year. Outmarriages defined as unions with spouse not Jewish at time of marriage. ( ) Percentage based on 11–20 cases.

Determinants of religious intermarriage: are Jews really different?

81

among the outmarried than among the inmarried, the decreasing difference makes it unlikely that the high divorce rates of outmarrieds can be explained by a disproportionate number of generally poor matches. Indeed, among the younger generation of American Jews outmarrieds appear to include many of “the best and the brightest” who are very good marriage partners in other dimensions. This suggests that the trends observed in Table 7.2 may be the result of increased complexity in the marital search. Cohort by cohort, as young American Jewish men and women have become wealthier, better educated, more cosmopolitan and more mobile, they have also become more varied in their opportunities and ambitions. Increasingly, religious compatibility has had to vie for consideration with such factors as type of education or career perspective, locational preference, and political leanings as well as personality, looks and age. Marital search has become correspondingly more complex, involving more traits (and more within-trait variation) to match with a potential partner. Such an increase in marital search complexity is consistent with both the observed decline in Jewish marital stability and the rising incidence of Jewish outmarriage.

Ecumenism and the Jews Three aspects of religion seem to be especially important for marital efficiency. The extent to which religious beliefs and practices are doctrinally similar affects religious compatibility between partners with different affiliations. The extent to which a religion emphasizes family-based practices and experiences (in contrast with a religion that is either intensely personal in its expression or, at the other extreme, more closely associated with public ceremony) will also affect the relative efficiency of outmarriage. The extent to which a religion clearly defines its membership and doctrinally distinguishes members from non-members is also an important factor in determining marital compatibility. Religious groups may be ranked along an “exclusivist–ecumenical” continuum according to their emphasis on the boundaries of group membership (Kelley, 1972). Initially developed to analyze the growth of various Protestant denominations, this continuum has also proved useful for understanding the stability of interfaith marriages (Lehrer and Chiswick, 1993). At one extreme, “exclusivist” religious groups have clear membership criteria, strictly enforced, frequently with specific penalties against outmarriage and sometimes even shunning of non-members. At the other extreme, “ecumenical” groups tend to have few membership criteria, vaguely stated and weakly enforced, and place relatively little importance on religious group boundaries. For couples with a given level of religious commitment, marriage between members of two different ecumenical-tending denominations would be less stressful than marriage between members of two exclusivist groups simply because religious boundaries matter less to the former. Jews are not the only American religious group concerned with high rates of outmarriage: among non-Hispanic whites first married since 1960, some 28 percent chose a spouse of another faith.4 Outmarriage rates were as high as 48 percent for the mainstream Protestant denominations, 36 percent for the

82

Economics of American Judaism

remaining (mostly exclusivist) Protestant denominations, 30 percent for Catholics, and 21 percent for Mormons, suggesting a positive association between outmarriage and ecumenism. Moreover many American religious groups have tended to become more ecumenical in their outlook over time. As the importance of group boundaries has diminished, the social environment has become increasingly friendly both to Jews and to interfaith couples and the perceived cost of outmarriage has correspondingly declined. Although outmarriages are generally less stable than inmarriages for all American religious groups, the difference varies inversely with ecumenism. For example, intermarriages involving two Protestant denominations near the ecumenical range of the spectrum are only marginally less stable than inmarrieds in those denominations, consistent with the relative unimportance of denominational boundaries for these groups.5 Similarly, persons reporting no religion (the ultimate, perhaps, in ecumenism) showed the same marital instability rate whether or not their spouse reported an affiliation. For all other religious groups, probabilities of marital dissolution before the fifth anniversary were at least 10 points higher for outmarrieds than inmarrieds.6 Since ecumenism enhances the ability of people from different groups to respect each other’s religious views and practices, it is not surprising to find it associated with higher incidence and greater stability of religious outmarriage. Yet ecumenism seems to have a destabilizing effect for persons marrying within the religious group. Among couples with the same religious affiliation, the lowest fifth-year dissolution probability was .13 for Mormons, who place great importance on group boundaries, and the highest was .36 for persons reporting no religion. Between these two extremes were inmarriages for Catholics and for some thirty Protestant denominations toward the exclusivist end of the spectrum, with fifth-year dissolution probabilities of .20.7 The experience of the Protestant denominations towards the ecumenical end of the spectrum is especially instructive. Some 38 percent of the inmarriages for these groups are conversionary, suggesting that at least one of the partners as an individual places importance on group identity. Such conversionary marriages are extremely stable, with fifth-year dissolution probabilities of only .13 in contrast to .24 for “naturally homogamous” marriages.8 The experience of “mainstream” Protestant inmarriages is thus fully consistent with an inverse relationship between ecumenism and marital stability.9 To what extent are these findings of relevance to the Jewish experience? Can the growth of ecumenism within American Judaism explain some of the observed decrease in Jewish marital stability as well as the Jewish community’s increased tolerance of outmarriage? Before this possibility can be considered, the exclusivist–ecumenical continuum must be defined in a way that is meaningful in a Jewish context. Among American Jews, exclusivism would be associated with those congregations, organizations and movements that emphasize the distinctiveness of the Jewish People among the nations. For this purpose, exclusivist criteria need not be limited to religious observance but might include, for example, secular

Determinants of religious intermarriage: are Jews really different?

83

Jewish nationalism (Zionism) or an acute awareness of potential persecution. In contrast, ecumenism would be associated with an emphasis on Judaism as a system of ethics, on social action, and on those beliefs (religious, social and political) which are held in common with similarly ecumenical non-Jewish neighbors. To the extent that Orthodox Jewry defines and enforces strict membership criteria, it belongs at the exclusivist end of the continuum. To the extent that Reform Jewry is vague about the definition of its boundaries and indifferent as to their enforcement, it belongs near the ecumenical end. However this characterization does not do justice to the within-denomination variety of American Jewish belief and practice. Although Orthodox Jews may articulate membership boundaries quite clearly (e.g., observance of Kashrut, Shabbat observance, wearing a kipa or other distinctive dress), individual practice may vary considerably and persons who relax their observance in some respects may still continue to identify as Orthodox. Some Reform and Reconstructionist groups can demand various forms of active participation by their congregants despite the loose membership criteria of their affiliation. Keeping this in mind, the figures in Table 7.3 suggest that Jewish denominationbased ecumenism, like that of non-Jewish religions, is positively associated with the incidence of outmarriage: outmarriage rates are 42 percent for those raised as secular Jews, 35 percent for those raised Reform, 22 percent for those raised Table 7.3 Outmarriages and marital stability by denomination raised Denomination raiseda

Percent outmarried

Percent divorced by tenth year All

Inmarried Jews All

Total Jews-by-birth Orthodox and Traditional Mixed Jewishb Conservative, Reconstructionist and “Just Jewish” Reform Secular, Misc., and No Religion Non-Jewishc Sample size

Men

Outmarried Jews

Women

All

Men

Women

25 10

6 3

5 3

5 5

5 2

10 2

11 5

9 (0)

21 22

7 6

3 5

(8) 4

0 6

* 13

* 15

* 12

35 42

8 8

6 9

6 (4)

6 (13)

11 (7)

11 (8)

11 *

66 2282

6 1581

4 1314

(6) 616

* 698

8 247

11 127

(4) 120

Source: 1990 National Jewish Population Survey (household weights). Notes a Includes all Jews-by-birth ever married by 1980. b Persons raised as both Orthodox and Conservative, both Orthodox and Reform, or both Conservative and Reform. c Jews-by-birth raised as non-Jews, whether or not they were also raised as Jews. * 10 or fewer cases. ( ) denotes percentage based on 11–20 cases.

84

Economics of American Judaism

Conservative, and 10 percent for those raised Orthodox. Denomination-based ecumenism is also positively related to the stability of outmarriages (with the notable exception of persons raised as Orthodox Jews) and negatively to the stability of inmarriages, although these associations are relatively weak. The overall pattern thus appears to be consistent with that found for other religious groups, especially with regard to the incidence of outmarriage. The weakness of the stability associations observed in Table 7.3 is consistent with the observation that denomination is an incomplete proxy for Jewish exclusivism. American Judaism contains a strong ecumenical component, but its appeal is widespread throughout all subgroups, including the Orthodox and Conservative as well as the Reform movements. Moreover Jewish universalist values are not inconsistent with a strong emotional identification with the Jewish people, religious or otherwise. To the extent that exclusivism is associated with relative instability of outmarriage, the data suggest that particularist identification is widely spread across the major Jewish denominations. Although the underlying reasons are as yet unclear, the distinctive way in which Judaism balances its universalist and particularist tendencies may affect the observed patterns of marital stability across Jewish denominations. Jewish distinctiveness may also provide insight into the limits of Protestant ecumenism. Table 7.4 presents tenth-year first-marriage divorce rates by cohort and spouse’s religion at time of marriage. Marriages with Protestant spouses have been the least successful, with a tenth-year divorce rate of 17 percent, while those with Catholics and spouses of “other” religions had tenth-year divorce rates of about 12 percent.10 Since it is expected that most of the Protestant spouses belong to the more ecumenical denominations, it is curious that their marriages to Jewish partners are less stable than those of Catholic spouses. Yet to the extent that

Table 7.4 Marital stability by spouse’s religion Year of first marriage

Percent divorced by tenth year Non-Jewish first spousea

Jewish first spouse Protestant Total Before 1950 1950–1959 1960–1969 1970–1979 Sample size

4 2 3 8 11 1322

17 (3) * (18) 21 57

Catholic 12 (16) (14) (10) 14 81

Other 11 * * * 12 46

Source: 1990 National Jewish Population Survey (household weights). Notes a Ever-married Jews-by-birth whose first spouse was not Jewish at time of marriage. * Denotes percentages based on 10 or fewer cases. ( ) Denotes percentages based on 11–12 cases.

None 3 (0) * (0) 8 70

Determinants of religious intermarriage: are Jews really different?

85

“mainstream” Protestantism effectively dominates American secular culture, persons from these denominations may be less self-aware of the balance between ecumenical and exclusivist tendencies in their own beliefs and doctrines. If Catholics who marry Jews understand more fully the implications of religious outmarriage than do Protestants, their marriages would be less subject to subsequent dissolution.

Outmarriage and the Jewish community This paper has explored some hypotheses as to the rising rates of Jewish outmarriage in the United States. From an individual’s perspective, increasingly complex marital search has led to higher outmarriage rates and lower marital stability among Jews. From the group’s perspective, exclusivism is defined as the clarity with which Jews identify and enforce the boundaries (implicit and explicit) between themselves and others, and this was shown to affect marriage patterns. This sense of Jewish identity appears to be moderately associated with denominational membership and affects selection of the first marriage partner. Another important dimension of the American Jewish story is the increased rates of divorce, attributable in part to rising ecumenism, in part to rising social acceptability (including improved opportunities for remarriage), and in part to the rising complexity of marital search. Divorce rates for inmarried Jewish couples have increased even more dramatically than those for outmarried Jews. As a result, the greater instability once associated with inter-faith marriage has been significantly eroded, and individual Jews no longer have this strong incentive to marry other Jews. Rising rates of Jewish outmarriage must be understood in the context of American religious pluralism. Ecumenism in any religious group appears to be associated not only with more outmarriage but also (for reasons that are as yet unclear) with decreased marital stability among inmarrieds. As changes in emphasis within the American Jewish community tip the balance between universalist and particularist values toward the universalist, the frequency of outmarriage can be expected to increase along with the relative success rate for interfaith marriages. The analysis in this paper suggests that a key factor in Jewish marital patterns is the American Jewish community’s response to religious ecumenism. To the extent that Jewish groups respond by blurring boundaries, ignoring the distinctive responsibilities associated with belonging to the Jewish people, inmarriage divorce rates can be expected to continue rising along with outmarriage rates. However if American Jewry can strengthen its sense of identity, integrating Judaism’s strong ecumenical tradition on social issues with its equally strong emphasis on membership in a distinctive and important group on religious and cultural issues, it may be possible to slow or even reverse the pace of outmarriage while at the same time increasing the stability of the Jewish marriage.

86

Economics of American Judaism

Acknowledgements This research has been partially funded by the Center for Research on Women and Gender, University of Illinois at Chicago. The author is grateful for comments from B. Chiswick, E. Lehrer, U. Rebhun, and various participants in the Demography Sessions at the 11th World Congress of Jewish Studies, as well as research assistance by Lidney Clarke, but takes full responsibility for all remaining errors.

Notes 1 For a fuller development of the economic model of intermarriage outlined in this section see Chiswick and Lehrer (1991). 2 These data are only for first-marriage experiences, whether or not the individual has since remarried. Kosmin et al. (1989) find interfaith marriages among Jews to be less stable than endogamous unions, and also that exogamy rates are even greater for second and higher-order marriages. Thus high rates of first-marriage exogamy raise divorce rates, and high divorce rates in turn raise overall rates of intermarriage. 3 To the extent that religious intermarriage occurs disproportionately among couples who are mismatched on multiple marital traits, the observed instability of outmarriages need not be related to religion per se. 4 Characteristics of non-Jewish religions reported in this and the following paragraphs are from Lehrer and Chiswick (1993), using data for 3,060 first marriages from the 1987–88 National Survey of Families and Households (NSFH). Among Protestants, religion was narrowly defined so that inter-denominational marriages were viewed as exogamous. Although the sample of (self-identified) Jews was small, amounting to only 3 percent of the total, the Jewish first-marriage exogamy rate of 27 percent was comparable to the overall rate of 28 percent. 5 Between-group differences in marital stability are estimated by fifth-year dissolution probabilities obtained from Cox-regressions which control for various characteristics of each partner and their families of origin. Adjustment for a possible sample selection bias in the NSFH would reduce the reported values of these dissolution probabilities by 3 points but would leave invariant all between-group differences. 6 Nearly all such differences were statistically significant at the 5 percent level. Although the sample of Jews was small and a difference could be discerned only at the 15 percent significance level, the magnitude of that difference was about the same as for Protestants and Catholics. 7 Within this large and heterogenous category, between-group differences were negligible and not statistically significant. Among groups with small samples, dissolution probabilities for Jewish inmarriages were higher (.27) and those for “all other” religions lower (.13), but these differences were not statistically significant. 8 This distinction proved not to be important for more exclusivist religions. Fifth-year dissolution probabilities for naturally homogamous couples were estimated as .19 for exclusivist Protestants and .20 for Roman Catholics. For conversionary inmarriages the corresponding probabilities were .16 and .19, respectively. 9 Causes for the inverse association between inmarriage stability and ecumenism have yet to be established. There is a tendency for supporters of exclusivist groups to attribute higher marital stability to their religious ideology. Yet the phenomenon appears to be generalizable across religions which differ considerably in their “family values”. The positive relationship between ecumenism and successful outmarriage further suggests that such an explanation may be too simplistic.

Determinants of religious intermarriage: are Jews really different?

87

10 An unknown number of the spouses who were not Jewish at the time of marriage actually may have been Jews by birth. It is possible that this is responsible for the fact that tenth-year divorce rates for no-religion spouses are comparable to those for Jewish spouses.

References Becker, G. S. (1991). A Treatise on the Family. Harvard University Press, Cambridge and London. Chiswick, C. U. and Lehrer, E. L. (1991). “Religious Intermarriage: An Economic Perspective.” Contemporary Jewry, Vol. 12, pp. 21–34. Iannaccone, L. R. (1991). “The Consequences of Religious Market Structure: Adam Smith and the Economics of Religion.” Rationality and Society, Vol. 3, pp. 156–177. Kelley, D. M. (1972). Why Conservative Churches are Growing. Harper and Row, New York. Kosmin, B. A., Lerer, N. and Mayer, E. (1989). “Intermarriage, Divorce and Remarriage Among American Jews: 1982–87.” Family Research Series, No.1, North American Jewish Data Bank, CUNY, New York. Lehrer, E. L. and Chiswick, C. U. (1993). “Religion as a Determinant of Marital Stability.” Demography, Vol. 30, pp. 385–404. Warner, R. S. (1993). “Work in Progress toward a New Paradigm for the Sociological Study of Religion in the United States.” American Journal of Sociology, Vol. 98, pp. 1044–1093.

Part IV

Jewish continuity

8

An economic perspective on religious education Complements and substitutes in a human-capital portfolio*,†

1. Introduction Education is an important aspect of religious life. Most parents aspire to raise their children in their own religion, defined broadly to include as “religion” any belief system that speaks to spiritual needs and for which there is a community of adherents. They also provide their children with a “secular” education that enhances their productivity as workers, as consumers and as members of society. Individuals may be viewed as choosing a portfolio of human-capital investments, some of which are religious (i.e., specific to a particular belief system) and the rest of which are secular (i.e., general with respect to religion). Religious and secular educations are thus substitutes for each other as they compete for investment resources, primarily time and money. The goal (output) of education is the formation of human capital. The prototype educational process is formal schooling, a system especially well suited to the formation of cognitive knowledge and certain types of decision-making skills. In a modern economic setting, formal schooling is also an important means of acquiring occupational skills that associate positively – and often strongly – with future earning power. Another method of human capital formation involves experience with activities that provide skills through observation, repetition or familiarity. On-the-job training is but one example. Other human capital is accumulated through social interactions that provide feedback about the desirability of various behaviors and produce memories crucial for identity formation. All three methods of education – schooling, experience and socialization – are important determinants of the human capital available to an adult decision-maker and affect his or her resource allocation decisions. The economics literature tends to focus on those types of human capital most relevant for the workplace, on investments in schooling and experience that raise the productivity of labor and therefore hourly earnings (Mincer, 1974, 1984). Other types of human capital that have received attention include investments in health (T. W. Schultz, 1980; T. P. Schultz, 1993), family (marriage and children) (Becker, 1981; Schultz, 1981),

* Reprinted with permission from Research in Labor Economics 24 (2006), pp. 429–467.

92

Economics of American Judaism

language (Chiswick and Miller, 1995), culture (including the arts) (Filer, 1990; Smith, 1998), religion (Iannaccone, 1990) and consumption (Becker, 1996). Religious human capital is defined as knowledge, skill, experience and memories that enhance productivity in religious activities but have little or no effect on the productivity of resources allocated to other types of output (Iannaccone, 1990). Examples of investment in religious human capital include the study (formal and informal) of religious subjects, participation in religious ritual at home and in the church (or its analog for non-Christian religions), experiencing religious holidays and life cycle events, involvement in religious communal life and learning the language used for religious observance. It is not simply that the value (utility) of religious experience is sensitive to the level of religion-specific human capital applied to a given set of resources, for the content of the religious human capital embodied in a person in some sense defines that person’s religion (Chiswick, 1999). As such, it is central to religious experience and a crucial aspect of the intergenerational transmission of each religion (Chiswick and Chiswick, 2000). Education involves ideas as well as skills, and various studies suggest ways in which religious human capital raises the productivity of other types of human capital (Chiswick, 2001; Iannaccone, 1998; Lehrer and Chiswick, 1993).1 It has also been argued that religious education has a positive effect on the productivity of secular education, with positive complementarities between these two investment activities (Darnell and Sherkat, 1997; Hollander et al., 2001). Researchers have paid less attention to the effects of secular human capital on religion, or secular education on religious education, which may be either positive or negative. A modern secular education generally increases the productivity of investments in other types of human capital and thus may be expected to have a similar effect on religious education. Yet religious education often appears to be structured around the notion that secular education leads to ideas and behaviors that are undesirable and that need to be counteracted or even destroyed (Sherkat and Darnell, 1999). Thus, while secular education may be a desirable investment overall, some of its components may have adverse effects on the productivity of religious training that offset positive complementarities and make the overall effect ambiguous. This paper focuses on how the curricula associated with secular and religious education, respectively, affect mutual complementarities in the production of these two types of human capital. Section 2 reviews the concept of religious human capital and presents a model of educational choices. Section 3 uses this model to discuss complementarity properties as they pertain to each type of education. Section 4 presents a preliminary test of the model with the experience with the American public school system of two religious groups, Protestants and Jews. Section 5 concludes with a discussion of some implications for the life of religious communities.

2. Religious education and the human capital portfolio The demand for religious education is derived from the production function for religious experience. The production function itself reflects a religious

An economic perspective on religious education

93

lifestyle choice, which is in turn affected by an individual’s tastes and preferences. Utility-maximizing consumers allocate their time between consumption and investment (education), and between religious and nonreligious activities. The problem can be expressed as Max U (Y, R) subject to LY  LR  LE  L*

(1)

where R is the religious good; Y all other consumption goods and services; LR the time spent in religious production, LY the time spent in nonreligious production, LE the total time spent in human-capital formation; and L* the total time available for all purposes. The two consumption goods, Y and R, are home-produced with production functions that depend primarily on human capital specific to each activity: Y  f(hYLY) R  g(hRLR)

(2) (3)

where hY is the level (quality) of general human capital and hR the level (quality) of religious human capital. The level of human capital thus enters the production function indirectly as a determinant of the total amount of human capital, HR ≡ hRLR or HY ≡ hYLY, which is (for simplicity) the sole input for producing the corresponding consumption good. Each type of human capital is in turn produced by an educational process with its own production function, the main input to which is the student’s time. These can be written inversely as cost functions, expressing the time cost of education as a function of the level of skill to be acquired. LE  LYE  LRE LYE  ϕ(hY) ϕ′, ϕ′′ > 0 LRE  (hR)  ωhYhR, ′, ′′ > 0

(4) (5) (6)

where LYE is the time spent in nonreligious learning activities; LRE the time spent in religious learning activities; and the constant coefficient  indicates the degree to which the acquisition of general human capital imposes an external effect on religious education. For example, if  0 a greater level of general human capital (hY) would make it more costly to acquire any given level of religious education (hR), while if   0 the opposite would be true. This problem is solved by maximizing the Lagrangian function: £  U(g(hRLR),f(hYLY ))  [LR  LY  (hR)  ϕ(hY)  ωhYhR  L*]

(7)

Its first-order conditions can be solved to yield: Ugg′hR  Uf f ′hY

(8)

94

Economics of American Judaism LR/hR  [′  hY] LY/hY  [ϕ′  hR] L*  hR′  hYϕ′    ϕ  3ωhRhY

(9) (10) (11)

Eq. (8) equates the marginal rate of substitution in consumption between religious and nonreligious uses of time to 1, the slope of the time-budget line, requiring that the marginal value of time be the same in both consumption activities. Eqs. (9) and (10) equate the slopes of the human capital quantity–quality isoquants, LR/hR and LY/hY, respectively, to the marginal cost of the corresponding type of education, allocating time to each type of education up to the point where the marginal time required for an additional unit of human capital is the same as the opportunity cost of that time in consumption activities. Eq. (11), which expresses the time constraint as a function of the levels of the two types of education, is obtained by solving Eqs. (9) and (10) for LR and LY and substituting the result into the constraint in Eq. (1). Eqs. (9) and (10) may also be solved for hR and hY, the result substituted into Eq. (8) and terms rearranged to yield: Ug g LR Uf f LY



  h

h  

Y

(12)

R

The expression on the left-hand side of this equation is the marginal rate of substitution in consumption between hR and hY, the slope of an indifference curve between levels of the two types of education. The right-hand side is the slope of a production possibility frontier (PPF) that holds constant LE, the total resources devoted to education. Optimization thus requires tangency between an indifference curve and a human capital PPF determined by the allocation of time between consumption and education. By varying the amount of time devoted to education, Eq. (12) implies an expansion path with a positive slope as long as both hY and hR are normal (in the sense that more resources devoted to education raises the demand for each type). In contrast, the boundary in Eq. (11) describes a single opportunity set where the overall constraint on time has been converted (by means of the educationproduction functions) into an equivalent constraint on the attainable combinations of human capital. This constraint generally has a negative slope, for which a sufficient condition is 0 (i.e., that any external effects of general education on religious education be non-positive). The overall solution to the consumer’s problem occurs where the time constraint crosses the expansion path either at a unique combination of hR and hy or at one of its corners. These relationships are illustrated in Fig. 8.1. Religious education, hR, is measured on the horizontal axis and all other education, hY, on the vertical axis. A family of PPF curves depicts the maximum combinations of human capital attainable from various levels of investment in education, each curve representing a different amount of LE. If each type of investment is subject to diminishing

An economic perspective on religious education

U1 U0

All other education

A

Expansion path

U2

hY

95

Total time constraint

PPF for LE fixed O

B

hR

Religious education

Figure 8.1 Optimal investment in education without externalities.

marginal productivity, the PPF will be concave to the origin (i.e., bowed outward), and Fig. 8.1 illustrates the case where there are no externalities to alter this property. A family of indifference curves reflects the utility attainable (indirectly from the own-production process) from various combinations of human capital, and the points of tangency between indifference and PPF curves describe an expansion path. The heavy line with a negative slope is the time constraint from Eq. (11). The consumer’s optimum occurs where the expansion path crosses the time-constraint boundary.

3. The effects of externalities on religious education Supply-side complementarity between investments in the two types of human capital, described by the sign and magnitude of the parameter , affects the shape of the opportunity set and the PPF curves. If secular education confers positive externalities on religious education (0), these curves would be bowed even further outward and the optimal investment for both types of human capital would be greater. If the two types of human capital have few complementarities and/or negative externalities (0), the family of PPF curves would be less concave and the optimal portfolio would not only be smaller but would also display a greater tendency toward specialization in investment. Fig. 8.2 illustrates the implications of negative externalities for decisions about religious education. The two axes represent different types of human capital: religious and nonreligious. The curve ACB is the PPF in the absence of externalities and point C, where the indifference map is tangent to the PPF, describes the

96

Economics of American Judaism Negative externalities expansion path

No-externalities expansion path

hY A All other education

C

E

O

B

hR

Religious education

Figure 8.2 Optimal investment with negative supply-side externalities.

optimal allocation of investment in education for this case. Negative externalities would reduce the concavity of the PPF and if large enough can even cause it to bow inward, as illustrated by the curve AEB. The optimal resource allocation in this (admittedly extreme) case is at point E. Negative externalities have two effects on the optimal allocation of resources. Because they increase the costs of education there is a scale effect, reducing the total amount of human capital attainable from fixed resources and hence the area under both the PPF and the overall time constraint. Negative externalities also induce a substitution effect, increasing the incentive to concentrate resources in one or the other type of human capital because the externalities raise the cost of combining the two. For example, an expansion path passing through the optimum at point E in Fig. 8.2 (corresponding to the PPF family to which AEB belongs) would be everywhere to the left of the nonexternalities expansion path passing through point C. Since externalities have a similar effect on the shape of the overall time constraint, altering it less near the corners than in the interior, the consumer’s optimum will be lower on the expansion path the greater the negative externalities. Fig. 8.3 further illustrates the substitution effect of an increase in negative supply side externalities on specialization in education. As in Fig. 8.2, the outwardly bowed PPF (curve ACC B) represents the case without supply side externalities in education while the inner PPF (curve AEE B) represents the case where there are large negative externalities. Fig. 8.3 displays two indifference maps corresponding to two different people with different productivity in the production of religious experience. For example, the solid curves might apply to a person living in a weak religious community and the dashed curves for a person in

An economic perspective on religious education

97

No-externalities expansion paths

All other education

hY A

C E C9

E9 B

O

hR

Religious education

Figure 8.3 Preferences and negative supply-side externalities.

a strong, vibrant one. Alternatively, the solid curves might represent a person with a talent for scientific analysis and the dashed curves a person more inclined toward the theological or mystical. While there will always be differences in the educational outcomes chosen by these two people, these differences will be far greater in the presence of negative externalities. The expansion path corresponding to point E lies to the left of the expansion path for point C, while the path for E lies to the right of the one for C. Geometrically, the more outwardly bowed (convex) the PPF, the closer the expansion paths for people with different preferences. Economically, this occurs because positive externalities reduce the cost of combining the two types of education, while negative externalities have the opposite effect. Fig. 8.4 illustrates the effect of an exogenous educational standard imposed by law or custom, for example, a compulsory schooling law that requires all children to receive at least C* amount of secular education. By effectively eliminating the area under C* (shaded) from the opportunity set, the constraint on general education induces substitution away from religious education. In the absence of externalities, the PPF would be ACCB; people with the solid-line indifference curves (tangent at point C) would be unaffected but people with dashed-line indifference curves would be worse off, moving from their unconstrained optimum at C' to C'' by substituting secular education for religious education. If there are negative externalities, the PPF would be AEEB and a constraint at C* would have an even more dramatic effect on the size of the feasible area, increasing both the likelihood and magnitude of adverse effects. People with the solid-line indifference curves would find a new optimum at E'', a corner solution with somewhat less utility than at the unconstrained optimum but with a much-reduced

98

Economics of American Judaism

hY

All other education

A

C C* E C

C

E

E O

B

hR

Religious education

Figure 8.4 Discontinuity constraints on optimal investment.

level of religious education. Those with the dashed-line indifference curves might also optimize at E'' but would experience a much greater reduction in utility and would prefer the corner solution at B. The illustrations thus far have assumed smooth production functions, yet education is often organized as a series of levels, or degrees, reflecting discontinuities in the underlying process. This characteristic suggests that one or both of the education production functions, (hY) for general education or (hR) for religious education, might be written as a step function. Fig. 8.4 can be used to illustrate the simple case where (hY) has a threshold at C* below which there is little or no value to general education. In contrast to the compulsory-schooling situation where outcomes in the shaded area are prohibited by law, here the constraint is inherent in the production function itself and outcomes in the shaded area represent wasted investments in general education. People with the dashed-line indifference curves would optimize not at E'' but at B, opting out of general education entirely and specializing in religious schooling. This model suggests a series of hypotheses relating religious beliefs with nonreligious educational attainment. Among those groups for which religious beliefs are either neutral or positively complementary with a secular educational curriculum, nonreligious educational attainment should be relatively high and similar across groups, without prejudice to religious education or degrees of religiosity. Among those groups for which religious beliefs are characterized by negative complementarities with a secular curriculum there should be a greater degree of specialization. Adherents with strong religious attachments are hypothesized to have lower educational attainment, while those with high educational

An economic perspective on religious education

99

attainment should exhibit a greater degree of religious skepticism and lower religiosity. Finally, groups for which negative complementarities are very strong should be most likely to opt out of secular schooling entirely, concentrating in occupations for which educational requirements are minimal.

4. Some evidence from the American school system The United States is a religiously pluralistic society in which public schools purport to be decidedly nonsectarian, if not completely secular. Yet inevitably some religious groups find their teachings to be less complementary than others. During the late nineteenth and early twentieth centuries, when urban public schools were taking on their modern form (i.e., graded classrooms from kindergarten through high school), their content and culture complemented the mainstream Protestant denominations whose members dominated the educational establishment. Fundamentalist Protestant teachings were less complementary with the public school curriculum, however, and these groups were more likely to develop patterns of nonattendance, with high truancy rates and low-educational attainment. The Catholic Church set up a completely separate alternative school system for their children, while Jewish parents sent their children to public schools but invested in after-school programs for religious education that reinforced a family-based Jewish “counterculture.” By the end of the twentieth century, American public schools had become more self-consciously secular, in part as a response to parental pressures as upwardly mobile religious minorities sought entry into a knowledge-based economy where high-level skills were at a premium. Even so, some religious groups benefited (in the sense of lower negative complementarities) more than others (Sikkink, 1999). As a test of the hypotheses developed above, this section considers some alternative strategies chosen by religious groups for whom negative complementarities with public schools are especially pronounced. Section 4.1 focuses on Protestants, looking at evidence that denominations differ in their behaviors according to the degree to which public schools are perceived to be compatible with their religious values. Section 4.2 considers the case of American Jewry, a very small religious minority that sends most of its children to public schools and has developed a variety of educational strategies to counteract negative complementarities. 4.1. Education and Protestant denominations Cultural conflict in the public schools (reflecting that in American society at large) has shifted from its historical focus on the divide between Catholic and Protestant belief systems to its current focus on the divide between the “sacred” and “secular” (Sikkink, 1999). Among other questions, the Religious Identity and Influence Survey (fielded in January–March 1996) asked: “In general, do you think that public schools are hostile to your moral and spiritual values?”2 Some 70 percent of the Pentecostals and 62 percent of the Charismatics answered yes,

100

Economics of American Judaism

as did 55 percent of Evangelicals and 51 percent of Fundamentalists. In contrast, among Mainline Protestants only 39 percent answered yes, as did 31 percent of Liberal Protestants and 25 percent of those who were “not religious.”3 This ranking of Protestant religious groups with regard to perceived negative complementarities is consistent with their rankings by educational attainment. Controlling for parents’ income, education and occupation as well as the gender and race of respondents, members of “Conservative Protestant” denominations have lower levels of educational attainment than do “Mainline Protestants,” and a similar (additional) negative effect is observed for respondents who believed that “The Bible is God’s word and all it says is true” (Darnell and Sherkat, 1997; Sherkat and Darnell, 1999; Lehrer, 2004).4 One study that considers the beliefs of students as well as their parents finds that Fundamentalist parents generally inhibit their children’s secular schooling but that they are less restrictive for children who themselves express strong religious beliefs (Sherkat and Darnell, 1999). This suggests that the parents’ concerns about secular schooling are indeed related to negative complementarities since they are willing to educate children with high levels of religious human capital (thus helping them move outward along an expansion path) but are reluctant to help them substitute general for religious education. Religious groups with the greatest negative complementarities might be expected to opt out of the public school system entirely. Some of the Protestant dissenters of an earlier era had a tradition of avoidance and (where compulsory schooling laws are binding) truancy and those religious groups were characterized by low educational attainment and consequently high rates of poverty (Sikkink, 1999). Other groups established religion-based day schools, a practice that was once dominated by the Catholic school system but has become more diversified in recent decades. There is also a growing “home schooling” movement, where parents take responsibility for educating their own children (Bauman, 2001). Among parents who choose home schooling for their children, the two most frequent reasons given are that their children will receive a “better education” at home (51 percent) and “religious reasons” (33 percent).5 Some of these complaints about the poor quality of public schools may also arise from religious considerations, whether from the perceived absence of religious teaching or from too much religious teaching of the “wrong” sort. This is explicit for the 14 percent of parents in the survey who say they “object to what school teaches,” and probably also for the 9 percent who say they chose home schooling in order “to develop character/morality” in their children. 4.2. Education and American Jewry Jews constitute less than 2 percent of the US population in 2000, down from a peak of 3.7 percent in 1940, and as such have little political influence on public schools.6 Yet Judaism has a very long history of being a minority religion, often in societies that are more or less hostile, and Jewish religious education takes this

An economic perspective on religious education

101

as its point of departure. Indeed, an important function of American-Jewish religious education is to help students recognize and be skeptical of incompatible religious teachings in their public schools without sacrificing the religion-neutral knowledge to which those schools give access. Jewish immigrants to America came primarily from Tsarist Russia and the countries of Eastern Europe in which religious hostility toward Judaism was deep and explicit. In such a setting, the negative complementarities between religious and secular education would have been pronounced, and Jews were likely to have specialized by emphasizing one or the other. Those who immigrated to America tended to be self-selected for people with strong preferences for secular achievement relative to religious observance, suggesting an indifference map (and therefore an expansion path) resting somewhat to the left of the old-country average. High career aspirations would have the same effect and compulsoryschooling laws – if binding – would further favor a substitution of general for religious schooling. The empirical evidence supports these hypotheses, suggesting that American Jewish immigrants emphasized a high level of secular achievement in the public schools for their children and either neglected their formal Jewish education or provided one that was little more than perfunctory (Sarna, 2004). America was a land of democracy and religious pluralism, a society whose values were enthusiastically embraced as compatible with Jewish tradition. Judaism is nevertheless a relatively human capital-intensive religion that requires substantial investment in any environment. Many immigrants underestimated the importance of Jewish education – both formal and informal – for producing Jewish experience in the new country, taking for granted the formation of Jewish human capital attained so inexpensively in an isolated oldcountry community. For the community as a whole, low levels of Jewish investment by its members would generate mutually reinforcing reverse bandwagon effects that would shift their expansion paths even further to the left (Chiswick and Chiswick, 2000). One important Jewish response to this “threat” was to work to make American society more hospitable to Jews and thus reduce the negative externalities between Jewish and general education (Dinar, 2004). The Anti-Defamation League was organized for this purpose, and many Jewish communal organizations had units focusing on political action or education of the general public, as appropriate. Interfaith activities also received support at all levels, based on the belief that anti-Semitism was born of ignorance and could be eroded by friendly relations between Jews and non-Jews (Silberman, 1985). The hypothesized effects of these activities are illustrated in Fig. 8.5 as a reduction in the convexity of the PPF, moving the optimum human capital portfolio from point E to F. Another popular response was to modify Judaism itself to reduce its dependence on specifically Jewish human capital. Secular Judaism has many variations, none of which require much in the way of Jewish education, and was especially popular in the early part of the twentieth century. The early Reform

102

Economics of American Judaism

General human capital

A

F

F E

B

O Jewish human capital

Figure 8.5 Optimal investment with adaptations in Jewish practice.

synagogue movement emphasized Jewish ethics and universal values over ritual, discarding the use of Hebrew for prayer, the dietary laws, and much of the “parochial” in Jewish holiday observance. (Many of these “reforms” have since been reversed.) By being selective in their definition of Judaism, the adherents of these modern variants could take pride in a heritage that was fully harmonious with American ideals, confident that Jewish parochialism was an old-country aberration and therefore an embarrassment undermining their American status (Wertheimer, 1993). The economic effect of this strategy was to alter the production function so as to reduce its reliance on specifically Jewish education, illustrated in Fig. 8.5 as an implicit movement from F to F . A third response involved revamping the curriculum of Jewish schools so as to enhance as much as feasible the complementarity between Jewish and general education. American Jewish children would learn to read and write English in the public schools before beginning their Hebrew studies, so English literacy could be assumed in the Jewish schools. Like the public schools, Jewish education was organized by age with each grade meeting in a separate classroom and taught from its own textbook. Hebrew schools run by the Conservative synagogue movement typically held class meetings after school and on Sunday mornings, while the Orthodox ran day schools that taught the general curriculum as well as Jewish studies. (Later generations would greatly expand the Jewish day schools even for non-Orthodox Jewish children.) Textbook and curriculum development for schooling in Hebrew, Jewish history, Torah and holiday observance continued to assume basic skills acquired in the course of a student’s general schooling (Wertheimer, 1999). While negative supply side externalities invariably remained important, they could be partially offset by the integration of Jewish and general studies.

An economic perspective on religious education

103

5. Implications for religious-group behavior patterns The model developed and applied in this paper focuses on the tradeoffs between religious and general education from the perspective of a utility-maximizing individual. The outcome of such a decision has important social implications. Negative complementarities between religious and general education can lead to social fragmentation both within and between groups. Within a religious community, they provide incentives toward polarization, encouraging a division between committed adherents with low general education (and hence earning power) on the one hand and a group with greater economic success but relatively little religious human capital on the other. This specialization can also fragment society at large, generating an inverse relationship between religiosity and income and further increasing differences among people with different religions in both behavior and attitudes. For intergenerational continuity, a religious community requires that its adherents invest in some minimum threshold of religion-specific human capital. Religious human capital is essential for intergenerational continuity in two respects. Since it is essentially what distinguishes one religion from another, the religious human capital acquired by each generation affects its ability to transmit religion to the next and there is presumably some minimum threshold below which an individual can no longer perform this function. Demographically religious human capital is, like most other forms of human capital, a homogamous marital trait (i.e., one for which “like marries like”) (Becker, 1981).7 The less religious human capital a person brings to the marriage market, the greater the probability that religion is outweighed by other attributes of a potential spouse and the higher the probability of religious intermarriage. Whether the spouses have the same or different religions, however, a couple with less religious human capital would be relatively less efficient both as consumers of religion and as religious educators in the home. Without communal support, their children are likely to become adults with even lower levels of religious human capital. Educational choices made by individuals may thus have important implications for the group as a whole, giving rise to the quasi-public good aspect of religion that has been explored elsewhere (Iannaccone, 1992). A religious group would be especially vulnerable to outcomes in which a significant part of its membership chooses a low level of religious human capital, regardless of whether – or perhaps especially if – they form a subgroup with high secular education. The analysis in this paper suggests that it is not the acquisition of general human capital that would matter for religious continuity but rather the extreme reduction in religionspecific human capital. Assimilation strategies that neglect religious education may not only weaken the religious attachment of individuals, but by generating reverse bandwagon effects they may also weaken the entire religious community. Individual choices that tend to concentrate on general rather than religious education are often attributed to changes in preferences in favor of a nonreligious “secularism.” The analysis developed above suggests that secularism itself may be

104

Economics of American Judaism

endogenous, the outcome of a time allocation problem in which religious human capital is relatively costly to acquire. Small differences in preferences that might not have much effect on educational attainment if the public school curriculum were neutral can lead to very large group differences if there are negative complementarities between religious and general education. The challenge to public education in a religiously pluralistic society is to minimize these adverse effects for as many groups as possible without sacrificing the substance of the general curriculum. In the early part of the twentieth century, many Americans viewed “assimilation” as a high-priority goal and immigrants invested heavily in general American human capital, “Americanizing” their religious practices as well. By the later part of the twentieth century, their grandchildren and great-grandchildren could be divided into those that felt that perhaps “assimilation” was bad – or, perhaps more accurately, that it was “too much of a good thing” – and those who were so assimilated that they didn’t care. The public discussion of this issue typically focuses on ethnic “multiculturalism,” but the phenomenon is clearly relevant for religious pluralism. For any religious group concerned with the transmission of adherence from one generation to the next, finding the right balance between assimilation and group cohesion is a fundamental issue. For a public school system concerned with the transmission of general knowledge from one generation to the next, finding the right balance between the sacred and the secular is similarly fundamental for longrun stability.

Acknowledgments The author wishes to thank especially Barry R. Chiswick and Solomon Polachek for their encouragement and suggestions. Any remaining errors, of course, are the full responsibility of the author.

Notes † An earlier version of this paper was presented in June 2004 at Bar Ilan University to Imigration, Minorities, and Social Exclusion, an international conference in memory of Tikva Lecker. It grew out of ideas initially presented in January, 2004 at Ben-Gurion University of the Negev to a conference on Economics of Religion. The current paper has also benefited from comments received at the 2004 meetings of the Illinois Economic Association and at seminars in George Mason University (Fairfax, Virginia) and the Curtin Institute of Technology (Perth, Australia). 1 Complementarities among various types of human capital are widely recognized as important. Health capital, for example, has been shown to raise the productivity of investments in schooling, while at the same time education raises the productivity of investments in health. See, for example, Schultz (1993). 2 The data in this paragraph are from Sikkink (1999). While the figures reported here are simple response rates, Sikkink finds that the ranking of religious groups by their hostility toward public schools remains unchanged after controlling for group differences in family income, education, and number of children. 3 Only 22 percent of churchgoing Catholics, 15 percent of nominal Catholics and 20 percent of persons with non-Christian religions responded yes to this question. Whether this is

An economic perspective on religious education

4 5 6

7

105

due to a “secularization” of these religions or simply different expectations from public schools will be discussed in the next section. This question on Biblical inerrancy was presented to respondents of all religions as one of four possible responses. More than one-third responded affirmatively. More than one reason could be given. The data in this paragraph are from the National Household Education Survey of 1996 and 1999, as reported by Bauman in Bauman (2001). During the earlier part of the century, first- and second-generation Jewish immigrants tended to concentrate in a few areas, notably New York City, where they were able to have some influence on the public schools. Elsewhere, however, their numbers were far too small to be felt as a political force. That is, people with high levels of religious human capital tend to select spouses who also have high levels for the same religion, forming family units for which the home production of religious education is more efficient (Chiswick, 1998). Conversely, people with low levels of religious human capital are inefficient producers of religion and tend to marry others who are similarly inefficient.

References Bauman, K. J. (2001). Home schooling in the United States: Trends and characteristics. Washington, DC: Population Division, US Bureau of the Census. Becker, G. S. (1981). A treatise on the family. Cambridge, Mass.: Harvard University Press. Becker, G. S. (1996). Accounting for tastes. Cambridge, Mass.: Harvard University Press. Chiswick, B. R., and Chiswick, C. U. (2000). The cost of living Jewishly and Jewish continuity. Contemporary Jewry, 21, 78–90. Chiswick, B. R., and Miller, P. (1995). The endogeneity between language and earnings: International analyses. Journal of Labor Economics, 13, 246–288. Chiswick, C. U. (1998). The economics of contemporary American Jewish family life. In: P. Y. Medding (Ed.), Studies in contemporary Jewry 14: Coping with life and death: Jewish families in the twentieth century (pp. 65–80). New York: Oxford University Press. Chiswick, C. U. (1999). The economics of Jewish continuity. Contemporary Jewry, 20, 30–56. Chiswick, C. U. (2001). The economics of Jewish immigrants and Judaism in the United States. Papers in Jewish Demography, 1997, 331–344. Darnell, A., and Sherkat, D. E. (1997). The impact of Protestant fundamentalism on educational attainment. American Sociological Review, 62(2), 306–315. Dinar, H. (2004). Multiple outsiderness: Religious, ethnic, and racial diversity in America. Contemporary Jewry, 24, 29–50. Filer, R. (1990). Arts and academe: The effect of education on earnings of artists. Journal of Cultural Economics, 14(December), 15–38. Hollander, G., Kahana, N. and Lecker, T. (2001). Human capital and the economics of religion. In: C. Chiswick, T. Lecker and N. Kahana (Eds), Jewish Society and Culture: An Economic Approach. Ramat Gan, Israel: Bar Ilan University Press, pp. 87–102. Iannaccone, L. R. (1990). Religious practice: A human capital approach. Journal for the Scientific Study of Religion, 29(3), 297–314. Iannaccone, L. R. (1992). Sacrifice and stigma: Reducing free-riding in cults, communes, and other collectives. Journal of Political Economy, 100(2), 271–291. Iannaccone, L. R. (1998). Introduction to the economics of religion. Journal of Economic Literature, 36, 1465–1496.

106

Economics of American Judaism

Lehrer, E. L. (2004). Religion as a determinant of economic and demographic behavior in the United States. Population and Development Review, 30, 707–726. Lehrer, E. L., and Chiswick, C. U. (1993). Religion as a determinant of marital stability. Demography, 30(3), 385–404. Mincer, J. (1974). Schooling, experience and earnings. New York: Columbia University Press for the National Bureau of Economic Research. Mincer, J. (1984). Human capital and economic growth. Economics of Education Review, 3, 195–205. Sarna, J. D. (2004). New paradigms for the study of American Jewish life. Contemporary Jewry, 28, 157–169. Schultz, T. P. (1981). Economics of population. Englewood Cliffs, NJ: Prentice Hall. Schultz, T. P. (1993). Investments in the schooling and health of women and men: Quantities and returns. Journal of Human Resources, 28(4), 694–734. Schultz, T. W. (1980). Nobel lecture: The economics of being poor. Journal of Political Economy, 88, 639–651. Sherkat, D. E., and Darnell, A. (1999). The effect of parents’ fundamentalism on children’s educational attainment: Examining differences by gender and children’s fundamentalism. Journal for the Scientific Study of Religion, 38, 23–35. Sikkink, D. (1999). The social sources of alienation from public schools. Social Forces, 78, 51–86. Silberman, C. E. (1985). A certain people: American Jews and their lives today. New York: Summit Books. Smith, T. M. (1998). Two essays on the economics of the arts: The demand for art and the occupational mobility of artists. Economics. Chicago: University of Illinois Press. Wertheimer, J. (1993). A people divided: Judaism in contemporary America. New York: Basic Books. Wertheimer, J. (1999). Jewish education in the United States: Recent trends and issues. In: D. Singer (Ed.), American Jewish year book 1999 (pp. 3–115). New York: American Jewish Committee.

9

The cost of living Jewishly and Jewish continuity*

Introduction Like most other Diaspora countries at the turn of the twenty-first century, the United States is a free and open society. Long gone are the days when Jews were compelled by non-Jewish authorities to live in ghettos, to wear distinctive clothing, or to be otherwise publicly identified so that their activities could be restricted. Over the course of the last two centuries these barriers have fallen at a faster or slower rate in various Diaspora countries, with periods of backsliding and periods of greatly expanding freedoms and secular opportunities. American Jews are now to be found in nearly all sectors and major institutions of society – business, government, education, professions and the arts. In this era of freedom the issue of Jewish continuity takes on a different meaning. Can Judaism and Jewish identity survive from generation to generation in a free and open society in which one’s Jewishness may be no more significant to others than the city in which one was born or the baseball team one cheered for as a youth? This paper will explore both the costs and benefits of living Jewishly and their effects on American Jewish continuity. Part II focuses on the costs faced by Jewish families and their consequences for the American Jewish community. Part III takes a broader view of Jewish continuity, looking at the cost of living Jewishly as it affects the marriage and career choices of young Americans.

The cost of Jewish living Jewish living can be very expensive.1 Although synagogue memberships vary considerably as to cost, most of them involve substantial annual dues (often accompanied by an obligatory contribution to the “building fund” or its counterpart) as well as a continuous stream of “opportunities” to make additional contributions for special occasions or causes. Yet only one third of all American Jews affiliate with a synagogue, and it is estimated that typically less than 3 percent of Jewish family income is allocated to Jewish philanthropies and synagogue memberships (Kosmin 1988; B. Chiswick 1991; Kosmin 1991; Rebhun 1997). Compared to other * Co-authored with Barry R. Chiswick. Reprinted with permission from Contemporary Jewry 21 (2000), pp. 78–90.

108

Economics of American Judaism

American religious groups the financial obligation associated with Jewish living is fairly high, but not extremely so. Even considering such collateral expenses as Jewish education, summer camps, or Bar/Bat Mitzvahs, few Jewish families spend as much of their income as the 10 percent tithe expected in some Protestant denominations. Indeed, by any objective standard the American Jewish community can well afford to sustain itself and support its own institutions. So why does everyone say that Judaism is so expensive? One reason is because Judaism tends to be a very time-intensive religion and time budgets are seriously constrained. We speak of “spending” time on an activity, of being unable to “afford” the time for everything we’d like to do, and of avoiding activities that “waste” time because they preclude spending it on a “better” alternative. Although money incomes have risen during the last century, the amount of time available for daily life is relatively fixed, effectively constrained (despite a shorter work week and longer life expectancy) by the finiteness of the day, year and life. The value of a unit of time is now very high, in part because of the generally high productivity of American workers, in part because of the relatively high skill levels of American Jews, and in part because of the expanding array of non-work opportunities available to American consumers. Indeed, it is the value of time in these many activities that effectively measures the value of scarce time.2 Although turn-of-the-century Jewish immigrants to America may have been fairly traditional in their Jewish observance by today’s standards, most of them were not especially religious by the standards of their own era. Indeed, the Jewish observance of immigrants was typically casual at best, the perception being that old-country Judaism was “unsuited” to life in the New World (i.e., “too” expensive). In this context the major American synagogue movements (mainly the Reform, Conservative and “modern” Orthodox) were accepted as religious innovations that adapted Judaism to its modern environment, primarily by reducing the time cost of Jewish observance (C. Chiswick 1995; C. Chiswick 1999). Religious innovations that raise the efficiency of Jewish resources constitute a decline in the real cost of being Jewish and a net gain for Jewish consumers, and indeed this is the economic basis for the strength of these “modern” forms of Judaism in the United States today. Yet social innovations often have unintended consequences, and the changes introduced by American streams of Judaism may be perceived as reducing the quality of Jewish living in some respects even as they increase it in others. Recent research on the economics of religion suggests that religions most vulnerable to such a decline in quality would share certain characteristics, including an important social dimension to the life of the religious group and an emphasis on religious “human capital” (Iannaccone 1988; Iannaccone 1990; Iannaccone 1992). Both of these characteristics are very important to Judaism, and their economic implications apply a fortiori to the experience of American Jews. In effect, they raise the possibility that reductions in the cost of Jewish living have been accompanied by a decline in the quality of Jewish experience that at least partially offsets the gain in communal welfare. The remainder of this section presents a brief sketch of the economic analysis as it applies to American Judaism.

The cost of living Jewishly and Jewish continuity

109

A religious group may be thought of as a special kind of “club” which people can join for motives which are essentially social rather than (or as well as) spiritual (Iannaccone 1988). In this respect Judaism must compete with other “clubs” for the money, time and energy of its members. Such competition may have been unimportant when Jews were restricted in their memberships outside the community, but in today’s environment of freedom Jews participate widely and actively in many social groups and political organizations. This expanded opportunity alone would imply a reduced amount of time and other resources spent on Jewish organizations (holding everything else constant), and hence less participation in Jewish life (B. Chiswick 1991). But the sense of belonging to a group (whether family, synagogue, community, or the entire Jewish People) is deeply embedded in Jewish ritual, to the point where attempts to separate religious adherence from Jewish identity (peoplehood) are often artificial at best. Where the social and spiritual dimensions of Judaism are inextricably entwined, substituting secular for religious social activities necessarily carries with it some decline in the intensity or quality of religious observance. The decline in the quality of Jewish life is further exacerbated by a “bandwagon” effect in reverse. Members who participate actively in any social group typically raise the value of belonging not only for themselves but for other members as well, effectively increasing the efficiency of resources (expenditures of time and money) for all members. People thus tend to be attracted to groups in which others participate actively, and there is a disincentive to join groups in which participation by others is marginal. Jewish institutions and organizations are especially vulnerable to this bandwagon effect because of the interaction between spiritual and social values, whereby the spiritual life of the community is adversely affected when participation declines. So as more people devise Jewish lifestyles that involve relatively low time on their own part, those who continue to devote a high level of resources to Jewish life would find that they are obtaining less satisfaction than before. As a result, they can be expected to reduce their own expenditures of time and money on Jewish life. The importance of religious human capital for Judaism can scarcely be exaggerated. Often associated with Jewish education and scholarship, religious human capital includes any knowledge or skill that raises the efficiency of resources devoted to current religious observance but has no corresponding effect on efficiency for secular activities (Iannaccone 1990). Religious human capital is acquired through previous activities, not only religious education (formal or informal) but also through experience with Jewish family, synagogue and community life. Perhaps the best example of Jewish human capital is the Hebrew language itself, the role of which is so important that basic religious education is often called “Hebrew School.” Knowledge of Hebrew has virtually no implications for American Jews in their secular activities. Yet even a rudimentary grasp of that language contributes greatly to the value of any Jewish experience, and a sophisticated knowledge of Hebrew is an entrée into the rich body of literature at the core of Jewish intellectual life. Knowledge tends to beget knowledge, and the high levels of secular education characteristic of American Jews can be expected to facilitate

110

Economics of American Judaism

(i.e., increase the efficiency of) Jewish learning. Yet because skill-formation activities tend to be fairly time-intensive, making them especially costly for a population with many attractive alternative uses of time, the trends in Jewish education have been ambiguous at best and often on the decline (Wertheimer 1989; Fishman and Goldstein 1993). A decline in Jewish participation for any reason, including the social motives discussed above, carries with it the implication of a reduction in the time spent in Jewish experience, a major avenue for acquiring the memories, knowledge, and skills which are an important component of Jewish human capital. American Judaism is especially vulnerable to this decline in religious human capital not only because it is a skill-intensive religion (using a language that has little or no secular value) but also because of the centrality of intergenerational continuity to Judaism itself. Parents teach Judaism to their children in part by example and in part through the integration of Jewish experience into ordinary family life. Low levels of Jewish observance in the home, perhaps because low levels of human capital make Jewish observance a less satisfying activity, give children fewer opportunities to acquire Jewish skills and memories. Thus a decline in Jewish human capital for one generation can have a cascading effect on succeeding generations, a downward spiral that can seriously erode the quality of Jewish life not only for the individual but also for the community as a whole. The American Jewish community has been mindful of these concerns and remedial steps have been (and are being) taken. Indeed, American Jewish culture exhibits many examples of an increase in Jewish education and experiences in many dimensions of its intellectual and spiritual life. Yet at the same time there have developed a variety of Jewish lifestyles compatible with very high values of time and very low levels of Jewish human capital. These Jewish identities require little or no religious education and emphasize elements common to Judaism and the non-Jewish society in which Jews live and work. To the extent that these Jewish lifestyles have been accepted by the Jewish community, they further reduce the incentive to acquire Jewish human capital and thus contribute to the perception of a decline in the quality of Jewish life. Consider a continuum along which American Jews would be ranked not by their religious beliefs or even practices but by the importance of specifically Jewish human capital for their preferred lifestyle. At one extreme would be those who ignore (or characterize as “obsolete”) Jewish religious ritual, who avoid associating themselves with the particularistic aspects of Jewish society, or who limit their definition of Judaism to its humanistic or universalistic precepts. At the other extreme would be those who emphasize specifically Jewish culture in any of its various manifestations, not only as religious ritual but also as politics, literature, history and the arts. The former would see little point to investments in Jewish human capital, focusing instead on acquiring skills that are of general use for both work and leisure in the larger society. But everywhere else along the continuum there would be some benefit to acquiring Jewish knowledge and experience, so the optimal investment decisions would include some Jewish as well as general human capital.

The cost of living Jewishly and Jewish continuity

111

Although American Jews have experimented with lifestyles nearly all along this continuum, economic incentives tend to discourage those in the center of the continuum. Many attractive alternatives compete with Judaism for their time, and high levels of secular human capital raise productivity in these other activities. The implicit cost of Jewish life is thus very high. If Judaism is perceived as an inferior choice the optimal response would be to allocate less time to it, thus beginning the downward spiral that leads to low levels of Jewish human capital and little commitment to Jewish communal life. If instead Judaism is perceived as a valuable “economic good” the optimal response would be to raise efficiency by acquiring more Jewish human capital, making Jewish life more satisfying and further stimulating the time and effort devoted to Jewish activities and communal participation. Both of these economically “rational” responses have contributed to the paradox of American Judaism described by one observer as “apathy and renewal” (Wertheimer 1993).

Love and work The cost of Jewish living in a free and open Diaspora community goes beyond the immediate concern with expenditures of money and time, whether on current activities or on investments in Jewish human capital for the future. “Jewish living” refers to a lifestyle, and lifestyle choices have implications for selection of a mate and for labor market opportunities. To the extent that different Jewish lifestyles impose different constraints, they may be viewed as having different cost implications for these two spheres of activity. Each of these very personal decisions on the part of individual Jews can collectively have an enormous impact on the Jewish community as a whole. Marriage is an enterprise that entwines two persons in multiple aspects of their adult lives, especially in the family life that they share as parents, as adult siblings, as cousins, and as the children of aging seniors. Although romantic love can strike anywhere, selection of a marriage partner is inevitably influenced by the potential for mutual productivity gains associated with this enterprise. For various reasons, human capital characteristics are generally subject to positive assortative mating in this selection process (homogomy), so that highly educated, very healthy, or especially attractive men and women tend to marry each other, as do those with low levels of these desirable traits (Becker 1981; C. Chiswick and Lehrer 1991). A lifestyle that makes heavy use of Jewish human capital is far easier (less costly) to sustain with a partner who has chosen a similar lifestyle, and the human capital intensity of Jewish observance enhances the gains from marriage the higher the spouse’s level of Jewish human capital. The greater the human capital intensity of one’s Jewish lifestyle, the greater the gain from marriage to a person with more Jewish human capital and the lower the likelihood of selecting a non-Jewish partner. Conversely a lifestyle in which specifically Jewish human capital plays little role extends the pool of potential marriage partners by including non-Jews whose religious human capital is similarly non-specific, or specific to another religion that is less family oriented.

112

Economics of American Judaism

If there are many human capital attributes to which the marriage market is sensitive, the complexity of the search process is greatly reduced by the tendency for them to be mutually correlated with each other. The highly educated tend to devote more resources to maintaining good health and vice versa, for example, and people with high skill levels in the workplace are more efficient at developing high skills related to home and family (Michael 1973; Becker 1981). But Jewish human capital seems to be something of an exception, in part because of the destabilizing forces discussed in the previous section of this paper. So the marriage market in which Jews participate is effectively sorting on two dimensions, one being a bundle of various types of secular attributes and the other a somewhat smaller bundle of Jewish skills and experiences. Those persons whose Jewish lifestyle is towards the low end of the Jewish human capital continuum will be sorting primarily on the secular dimension, while those at the high end of the Jewish human capital continuum will be sorting on both dimensions simultaneously. Searching simultaneously on both secular and Jewish dimensions introduces the possibility of tradeoffs and hence a “poorer” outcome with respect to one or the other (secular vs. Jewish) attributes. The pool of potential marriage partners is also much larger for those satisfied by low levels of Jewish human capital, for it includes many non-Jews with similarly low levels of religious human capital. The twentieth century has seen the breakdown of many social barriers between Jews and non-Jews, virtually removing the adverse effects for Jews of residential segregation and discrimination in higher education, the labor market, clubs, etc. With the expansion of social interactions between Jews and non-Jews there is less of the anti-Jewish prejudice that would make interfaith dating and interfaith marriage unacceptable to the non-Jewish party. Taken together with reduced levels of religious human capital in many non-Jewish groups, this further reduces the proportion of Jews in the relevant potential marriage market pool. The number of non-Jewish potential marriage partners in the United States can be substantial, since Jews comprise only 2 percent of the total population and less than 4 percent of the college educated (B. Chiswick 1992; Goldstein 1992; B. Chiswick 1993; C. Chiswick 1995).3 Jewish lifestyles also vary considerably in the extent to which they impose costs when Jewish identity or observance interferes with secular educational attainment and with the labor force processes of hiring, promotion and career advancement. For many these costs may be small or trivial, while for others they may be substantial. Undoubtedly, the cost is larger the greater the extent of involvement in visible Jewish practices. In the corporate or academic world (outside of Jewish Studies) wearing a kipa might be considered embarrassingly parochial, observing kashrut perceived as irrational, and not working on Shabbat and Jewish holidays viewed as a sign of low commitment to firm or profession.4 These are certainly not new issues, but neither have they entirely disappeared with the reduction of social barriers between American Jews and non-Jews. While such costs may be reduced by entering a sheltered sector of the economy (for example, Jewish communal service, the rabbinate or a profession in which

The cost of living Jewishly and Jewish continuity

113

these penalties are smaller), this has little appeal for most American Jews. Jews are too diverse in their career choices, and too small a minority in most of occupations, for the development of an enclave economy which would not substantially limit the scope of their labor force activities and hence incomes. Moreover, most American Jews value their interactions with the non-Jewish world and believe that the Jewish community as a whole would be disadvantaged if the observant were to be segregated into a “Jewish” economic sphere. Yet the secular labor market, nevertheless, imposes a cost to Jewish observance that is greater the greater the “visibility” of Jewish practice and the closer its adherence to the Jewish calendar and rhythms of daily life (C. Chiswick 1996). Throughout the first half of the twentieth century, Jewish “assimilation” referred to integration into the larger society and was viewed as a highly desirable goal in itself as well as a prerequisite for financial and political security. Jewishness itself was taken for granted as an ascribed characteristic which could not be shed, but which might become transparent in an “Americanized” Jewish community. By the end of the century it was economic and social integration that was taken for granted by American Jews and “assimilation” refers to the loss of Jewish identity associated with outmarriage and apathy. Human capital has played a key role in this reversal, for in the earlier period Jews allocated most of their educational investments to secular achievements without fully appreciating the extent to which Judaism requires Jewish-specific human capital to sustain itself in an open society (C. Chiswick 1999).

Policy recommendations The Jewish community has made many adjustments to enhance its intergenerational continuity as a religious group, focusing its concern on both the number of Jews and the content of what it means to be Jewish in a modern, democratic, free Diaspora. Even so, the American Jewish community has not yet stabilized and the challenges that remain are enormous. The economic perspective developed in this paper is suggestive of some directions for continuing adjustment in the future. Jewish continuity requires the transmission of Jewish knowledge, skills, experiences and memories. These must be imparted to Jewish youth by their parents (many of whom may require education themselves in order to fill this role) and by Jewish institutions in the community. Yet they can not come at the expense of the high level of secular education that not only generates economic security but also constitutes an important aspect of American Jewish identity. Moreover, the suburban Jewish community of today can not benefit from the concentrated residence patterns of the past, whether a European-style ghetto or a densely Jewish urban neighborhood. Thus the formation of Jewish human capital must rely on a system of Jewish education, whether formal or informal, that supplements and reinforces the secular education received by Jewish children.5 Jewish day schools that combine the secular and Jewish subjects are promising in this respect, insofar as they educate youth to live and work simultaneously in both

114

Economics of American Judaism

the secular and Jewish spheres. Yet much of Jewish human capital requires maturity beyond childhood, suggesting the need to develop comparable institutions for the education of older youths and adults. The expansion of Jewish education will be very expensive (in both time and money), and even families who desire Jewish continuity may find it too great a sacrifice. Greater emphasis needs to be placed in fund raising on the importance of Jewish education for continuity. Yet contributions to Jewish philanthropies are under increased competitive pressure as declines in Jewish identity, increases in secular activities, and rising intermarriage rates have all been associated with a shift in giving toward non-Jewish causes (B. Chiswick 1991). At this point in American Jewish history the will to acquire a Jewish education may be the key factor in the decision to finance it. Perhaps a redirection of fundraising priorities would be appropriate, placing less emphasis on the amount of money to be raised and more on the function of contributions (of time and/or money) as an expression of Jewish identity. A reappraisal of priorities may also be necessary for the expenditures of philanthropic dollars. With the low birth rate and consequent aging of the American Jewish population, many communities find themselves providing high-quality services to the aged but low-quality services for youth. A partial redirection of resources from the aged to the young may be a necessary adjustment for Jewish communal survival, and one would hope that the grandparents would appreciate the importance of this reallocation of resources. While hardly a panacea for the American Jewish community, the school choice/school voucher movement has some promising implications (Wertheimer 1999b). Zero-tuition public schools present tough competition for tuition-charging Jewish day schools. A voucher program that successfully levels the playing field by reducing (or eliminating) the discrepancy in the money cost for the two types of schooling may be very effective in promoting Jewish education among American youth. Moreover a substantial increase in Jewish school enrollments would permit “economies of scale,” reducing the average commuting time for Jewish students, encouraging the development of new educational materials and techniques, and lowering the cost per student of providing Jewish schooling. Although much Jewish human capital is formed in the home, there are many parents who largely missed out on this aspect of Jewish education when they were young. Rather than viewing them as a lost generation, they should be viewed as an opportunity. “Night school” was an essential part of the American education of adult Jewish immigrants at the turn of the twentieth century. A new night school movement may be needed for the Jewish education of young adults at the turn of the twenty-first century. The facilities exist in synagogues, JCCs and Jewish day schools, and most are already providing some form of adult education. But its scope needs to be broadened, including community-wide efforts that promote the idea that “Jewish education is not just for children anymore” and that continuity begins with Jewishly educated and involved parents. While out-marriage should be recognized as symptomatic of low levels of Jewish human capital, reducing the relative cost of in-marriage should be a high priority for the American Jewish community. Surely the synagogues should try to

The cost of living Jewishly and Jewish continuity

115

develop roles for Jewish singles, whether teenagers or adults, that would integrate them into the community as well as providing a social outlet. Yet it is on the college and university campuses, while in undergraduate, graduate or professional school, that so many youths find their mates. Hillel Houses (or a comparable institution) can serve a useful function there, but they require imaginative programming and perhaps more linkages to other Jewish communal institutions. If the entire community would probably benefit by paying more attention to the Jewish potential of its youth, the traditional two-parent, and the increasingly common single-parent, Jewish family also needs to be better integrated into Jewish communal life. Synagogues, Jewish Community Centers and Jewish summer camps need to be more responsive in their dues/fee structures to lowerincome households. The increasing family orientation of synagogues is a plus. Yet most communal institutions need to broaden their approach so as to incorporate single-parent families and Jewish singles of all ages into their structures. Workplace barriers to Jews have fallen dramatically over the past century. Yet many professions (outside of Jewish communal service itself) still present barriers to members who wish to combine Jewish religious practice with full participation in their profession. The goal should be that Jewish religious practice should not have to come at the expense of occupational choice and professional advancement. Usually this merely requires raising the level of consciousness of others, but sometimes it may require legal action. Always, however, it requires the support of other Jews, for nothing is more undermining of the exercise of Jewish observance than the lack of support from Jewish colleagues who prefer other lifestyles. The community as a whole needs to focus attention on mutual supportiveness among Jews and to work toward removal of remaining workplace barriers, whether implicit or explicit. Judaism has survived 3,500 years, mostly in Diaspora. There has been no period in which Judaism and Jewish continuity has been achieved without cost, and today is no exception. Jews and Judaism have in the past shown a remarkable resilience to stresses introduced by these costs and by changes in the secular world around them. Surely modern Jewry should be able to do the same. Indeed, the ingredients exist for a successful response to the challenges ahead in the early twenty-first century United States. All that is required is the imagination and will of a committed Jewish community.

Notes 1 For an interesting estimate of the out-of-pocket costs for various categories of Jewish expenditures see Monson and Feldman (1995). 2 By this measure even children can have a high value of time. For example, time in Hebrew school competes with time for secular school studies as well as the myriad of after-school and weekend activities ranging from ballet lessons to football practice. 3 Suppose, for example, that by ignoring Jewish human capital a person would be willing to consider as a potential spouse any highly educated person (which for the sake of this example would include all Jewish partners). Then the pool of potential partners would

116

Economics of American Judaism

be 25 times larger than if it were limited to Jews only. Even if only 40 percent of these non-Jews were available because of the low specificity of their own religious human capital, the pool of potential marriage partners would still be larger by a factor of ten. 4 As but one example of the cost of Shabbat observance, many academic professional associations now schedule their meetings over the weekend to take advantage of reduced airfares if there is a Saturday overnight and the lower hotel room rates on weekends. Or consider the long-time Shabbat-observing employee who Chrysler Corporation wishes to fire after reassigning him to a shift that includes Friday night (Forward 1997). 5 See Wertheimer (1999a) for an excellent delineation of the Jewish education system in the U.S.

References Becker, Gary S. (1981). A Treatise on the Family. Cambridge, Mass: Harvard University Press. Chiswick, Barry R. (1991). “An Economic Analysis of Philanthropy” in Contemporary Jewish Philanthropy in America. B. A. Kosmin and P. Ritterband. Savage (Maryland): Rowman & Littlefield, 3–15. ——. (1992). “The Postwar Economy of American Jews.” Studies in Contemporary Jewry 8. New York: Oxford Press, 85–101. ——. (1993). “The Skills and Economic Status of American Jewry: Trends over the Last Half Century.” Journal of Labor Economics 11 (1, Part 1: Essays in Honor of Jacob Mincer), 229–242. Chiswick, Carmel U. (1995). “The Economics of American Judaism.” Shofar, 13(4): 1–19. ——. (1996). “Israel and American Jewry in the Year 2020: An Economic Analysis” in The Macro Scenarios: Israel and the Jewish People. A. Gonen and S. Fogel. Haifa: The Technion, 257–272. ——. (1999). “The Economic Adjustment of Immigrants: Jewish Adaptations to the United States” in Roberta R. Farber and Chaim Waxman (eds.), Jews in America: A Contemporary Reader. Brandeis University Press: 16–27. Chiswick, Carmel U. and Evelyn L. Lehrer (1991). “Religious Intermarriage: An Economic Perspective.” Contemporary Jewry, 12, 21–34. Fishman, Sylvia Barack and Alice Goldstein (1993). “When They Are Grown They Will Not Depart: Jewish Education and the Jewish Behavior of American Adults,” Cohen Center for Modern Jewish Studies, Brandeis University. Forward, “Shabbath Observer Faces Firing at Chrysler,” December 26, 1997, p.3. Goldstein, Sidney (1992). “Profile of American Jewry: Insights from the 1990 National Jewish Population Survey.” American Jewish Yearbook 1992. Iannaccone, Laurence R. (1988). “A Formal Model of Church and Sect.” American Journal of Sociology 94 (Supplement), S241–S268. ——. (1990). “Religious Practice: A Human Capital Approach.” Journal for the Scientific Study of Religion, 29(3), 297–314. ——. (1992). “Sacrifice and Stigma: Reducing Free-riding in Cults, Communes, and Other Collectives.” Journal of Political Economy, 100(2), 271–291. Kosmin, Barry A. (1988). Understanding Contemporary American Jewry: Implications for Planning. New York, CUNY Graduate Center, North American Jewish Data Bank. ——. (1991). “The Dimensions of Contemporary American Jewish Philanthropy” in Contemporary Jewish Philanthropy in America. B. A. Kosmin and P. Ritterband. Savage (Maryland): Rowman & Littlefield, 17–30.

The cost of living Jewishly and Jewish continuity

117

Michael, Robert T. (1973). “Education and the Derived Demand for Children.” Journal of Political Economy 81(2, part 2): S128–S164. Monson, Rela Geffen and Ruth Pinkenson Feldman (1995). “The Cost of Living Jewishly in Philadelphia.” Journal of Jewish Communal Service, 148–159. Rebhun, Uzi (1997). “Similarities and Dissimilarities in National and Community Surveys: The Case of American Jews.” Papers in Jewish Demography 1993, 55–78. Wertheimer, Jack (1989). “Recent Trends in American Judaism” in American Jewish Yearbook, 89, 63–162. ——. (1993). A People Divided: Judaism in Contemporary America. New York: BasicBooks. ——. (1999a). “Jewish Education in the United States: Recent Trends and Issues.” American Jewish Yearbook 1997. New York: American Jewish Committee: 3–115. ——. (1999b). “Who’s Afraid of Jewish Day Schools?” Commentary (December 1999): 49–53.

10 The economics of Jewish continuity*,†

I. Introduction Much is being written these days about the “dangers” of assimilation, by which it is meant that many individual Jews are adopting behavior patterns and making life choices that fail to support the perpetuation of Judaism into future generations. Presumably the danger here is from the perspective of the group, for if assimilation is the result of a free and informed choice it is difficult to argue that the individual is being victimized. Moreover even from the group’s perspective the assimilation “problem” is probably best thought of as one of degree, since adaptability to local custom and mores is an important survival trait. Thus the problem may not be assimilation per se but rather “too much” of a good thing, the challenge to Jewish continuity being to find the optimal balance between distinctiveness and extinction. The Jewish community is defined broadly here to include any network of relationships among Jews qua Jews, and the community’s survival refers to its Judaism rather than to the fate of individual Jews. Exit is assumed to be possible, not only physically – by death or emigration, both of which are options beyond the scope of this analysis – but also socially by various processes encompassed by the term “assimilation.” It is also assumed that the Jewish environment is embedded in, and typically dominated by, that of a much larger “general” society in which there is no Jewish component. Jewish history is in large part the story of people living in such communities, all of whom borrowed and adapted some characteristics from their respective neighboring cultures. While this process is often described as cultural assimilation, in the present analysis the term “assimilation” is reserved for the extreme case of a break in Jewish continuity. Assimilation in this sense can be formal and purposeful, as in a religious conversion, but it can also be the unintended consequence of carelessness or indifference. For the purpose of the present analysis it must also be voluntary, a loss of Jewish identity resulting from Jewish choices rather than forced conversions, expulsions, or killings imposed from outside the community.

* Reprinted with permission from Contemporary Jewry 20 (1999), pp. 30–56.

The economics of Jewish continuity

119

To be meaningful, establishing the survival of a Jewish community requires only that its communal life persist long enough to exhibit intergenerational continuity. Over the millennia of Jewish history whole civilizations are observed to rise and fall and nearly every known Jewish community—regardless of size and structure—has eventually come to an end. The largest communities dominate the historical record, especially if they had a fully functioning organized communal structure. Yet there have always been outlying communities where a group of families would organize some sort of mutual support for their Jewish lives, and there have always been places where one or two families might constitute an isolated Jewish outpost. It is plausible that the latter are mostly “new” Jewish communities that, like other new enterprises, have a high rate of failure, and information on failed communities is understandably fragmentary and anecdotal. From this perspective nearly every Jewish community that actually enters the historical record is in some sense a survivor. An operational definition of a community’s survival thus requires a time dimension, and historical observation must focus not only on its eventual demise but also on its duration as a viable community. Taking a broad view of Jewish history, this analysis makes frequent use of generalizations from the experience of Diaspora Jewish life in many different cultures over a period of over two thousand years. This very long-run perspective has many pitfalls but serves two important purposes. It focuses attention on the fact that Judaism is demonstrably capable of surviving in a wide variety of environments, whether hostile or friendly, rich or poor, Christian or Moslem (or something else). It also permits restricting the “data” on Jewish survival to completed episodes – that is, communities for which the circumstances of survival, assimilation and demise are known. In this spirit the Judaism of the nineteenth and twentieth centuries, dominated as it has been by the Enlightenment and its many consequent upheavals in Jewish life, is viewed as an incomplete episode and ignored here as much as possible.1 This paper develops an economic model of assimilation and uses it to analyze the determinants of Jewish continuity. An economic model of ethno-religious group membership is developed in Part II, where the notion of group-specific (Jewish) human capital is central to the very definition of ethnic identity.2 This formulation implies two requirements for Jewish continuity: continued affiliation of individuals to the Jewish community and continued investment by Jews in Jewish human capital. The economic characteristics of Jewish human capital are discussed in Part III, focussing especially on the complementarities between Jewish and non-Jewish investment patterns. In Part IV Judaism’s structure of “sacrifice and stigma” is analyzed for its effect on the economic incentives to assimilate. Part V concludes with a summary of the analysis and its implications for Jewish continuity.

II. An economic model of Jewish identity Judaism is a “good” in the sense that it is desirable but not costless. That is, Jewish identity provides benefits both tangible and intangible, but requires diversion of scarce resources from other uses. Jewish identity is used here in its

120

Economics of American Judaism

broadest sense, including not only religion and ritual observance but also consumption patterns associated with Jewish ethnicity (e.g., food, entertainment, charities, social groups). Similarly, costs are defined broadly to include not only expenditure of money on goods and services but also time spent in Jewish activities. As with many other socially embedded economic goods, Judaism is not purchased directly but is self-produced by a process which combines the time and money of individuals, sometimes singly and sometimes collectively (Azzi and Ehrenberg 1975). The collective aspects of this process make it a quasi-public good in the sense that the consumption activities of many individuals are mutually interdependent (Iannaccone 1988; Iannaccone 1992).3

A. The structural model Just as Judaism is a desirable good competing for the scarce resources of Jewish consumers, an analogous ethnic or religious “good” is hypothesized for each of the non-Jewish groups that make up the larger society. Let E denote the composite good associated with membership in a particular ethno-religious group, yielding utility for members of that group only. Without losing generality, the present analysis is limited to the simple case of two groups, Jewish and non-Jewish, whose respective goods are denoted EJ and EN wherever the distinction is relevant. For the moment it is assumed that each individual belongs unambiguously to one group or the other, although this assumption can be relaxed later in the analysis. Individual i would choose a consumption pattern that combines goods and services specific to his or her group affiliation, Ei (that is, EiJ or ENi), and other (general) goods, Zi, so as to maximize utility Ui U (Zi, Ei) UZ, UE  0; UZZ, UEE  0, UZE  0

(1)

subject to budget constraints on both income and time. Home Production Functions. Each individual i produces the general consumption good Z by combining purchased goods and services with his or her own time and skills: Zi  g (x, t; Gi)

(2)

where x  a vector (xk) of market goods and services t  a vector (tk) of time inputs corresponding to x Gi  individual i’s general human capital with g( ) exhibiting the usual convexity properties.4 Just as the good Z yields utility for all consumers, regardless of their group affiliation, general human capital G is defined broadly to include not only work-related skills and experiences but also any skills that contribute to the efficiency of Z-production.

The economics of Jewish continuity

121

The same inputs used to produce the general good Z (purchased goods and services, time, and general human capital) can also be allocated to production of the ethnic good E. In contrast ethnic-specific human capital, denoted J and N respectively for the two groups, enhances productivity for the corresponding ethnic good but has no effect on productivity for either the general good Z or for the good associated with another ethnicity. Ethnic good production is also affected by the quality of the ethnic environment, a term that incorporates any efficiency-enhancing characteristics associated with group-specific social interactions and institutions. Each individual i thus produces an ethnic good according to one of the following production functions: EJi  f J(x, t; Gi, Ji, qJ) ENi  f N(x, t; Gi, Ni, qN)

(3) (4)

where Ji  Jewish-specific human capital (experience, education) Ni  human capital specific to non-Jewish ethnic groups qJ, qN  quality of the group-specific ethnic environment and both functions f( ) are characterized by the usual convexity properties. Human capital formation. General human capital is accumulated by an investment process (e.g., education or training) characterized by increasing returns, in that learning itself becomes more efficient the higher the level of prior skill. G  r (tG, G, J, N)

(5)

where tG  time spent acquiring general human capital (G). The level of ethnic-specific human capital enters this educational production function because of complementarities between different types of skill. For example, Hebrew literacy is a Jewish-specific skill that does not affect efficiency in producing the general good (Z) but it does have efficiency implications for acquiring literacy in the general language (G). Similarly, investments in ethnicspecific skills benefit from a higher level of general skills even as they compete with general investment for the student’s time: J  (tJ, G, J, qJ) N   (tN, G, N, qN)

(6) (7)

where tJ, tN  time spent acquiring ethnic human capital J, N. The quality of the ethnic environment facilitates group-specific investment by enhancing motivation and learning opportunities while reducing group-specific resource costs. Since most educational processes are relatively intensive in

122

Economics of American Judaism

students’ own time, other inputs (goods and services) are ignored for the sake of simplicity except insofar as they enhance the quality of the ethnic environment. All education production functions (g, and n) have the usual convexity properties.5 Ethnic Environment. Following Iannaccone (1988), each group’s production function is assumed to be exogenous to the individual consumer and positively related to the intensity of ethnic consumption by other members of the same group. For the present analysis it is helpful to distinguish between the ethnic environment within the household and that of the larger community. In the simplest case: qJ  q (EJHH, EJ) qN  q (ENHH, EN)

(8) (9)

where EHH  ethnic good consumption by spouse and family members and E  ethnic good consumption by other members of the same group. Thus each person’s consumption of the Jewish good affects the quality of the Jewish environment for others in their family and community whose Jewish consumption in turn affects their own environment (qJ). The non-Jewish group is characterized by a set of analogous relationships between its own ethnic consumption and well being. The interaction among household members places a premium on ethno-religious homogeneity as a consideration for marriage and household formation. Just as human capital increases one’s efficiency as an individual consumer or producer, it also increases one’s efficiency in a partnership. If marriage is a partnership for consumption and for raising a family, the greater one’s own level of human capital the greater the potential gain from a partner’s contribution and, similarly, the greater one’s attractiveness to potential partners. Human capital in general – hence group-specific human capital in particular – is thus a positive marital trait that intrinsically carries an economic incentive for within-group homogomy (Becker 1981). For example, home-production of Judaism is more efficient with a partner who has a high level of Jewish human capital, and the potential gain increases with one’s own efficiency in Jewish consumption. This mutual benefit means that Jewish human capital is a positive marital attribute for which “like marries like.” Since all members of a group share the same value for the quality of its environment, and since the benefit of this is not diminished by use, the Jewish (or non-Jewish) environment has the essential properties of a public good. In principle, an individual could stretch his or her consumption budget by trading off between E and q, spending less on the ethnic good and compensating for this by finding a more favorable environment. For example, instead of studying Hebrew and Torah or taking initiative for holiday preparations, one might rely on the activities of friends and neighbors to provide a favorable religious environment. However, what is good for

The economics of Jewish continuity

123

the individual in this case is not optimal for the group as a whole and if everyone followed this strategy, the quality of communal life would be adversely affected. This “free-rider” problem is a characteristic of all public goods: each person has an incentive to want others to buy more of it while he himself buys less.6 People thus have an incentive to support the group’s efforts to increase its members’ consumption of the good, even if this means spending more on it themselves. Groups typically solve this problem by seeking ways to alter their members’ incentives to participate, sometimes reducing the relative price of E – either by direct subsidy or by taxing Z – and sometimes by finding ways to subsidize q. For example, a difficult initiation rite or a high annual fee would discourage people with very low consumption of E, so members would tend to have a higher average level of E and thus enjoy a higher quality environment, q. While religions may be unable or unwilling to use fees and taxes for this purpose, they can achieve an equivalent result very effectively with a system of “sacrifice and stigma” (Iannaccone 1992). Assimilation. Group-specific human capital effectively defines the boundaries between different groups. It is a permeable boundary that permits change, for modeling the preservation of identifiable groups over long periods of time requires the possibility of between-group mobility that allows one group to expand at the expense of another. In the present simplified analysis children are “raised” Jewish or non-Jewish according to whether their parentally determined investments create J or N, and decisions to change affiliation – whether by marriage, by conversion, or by de facto assimilation – are made by adults in this context. People leaving Judaism would lose the opportunity to use their previously acquired Jewish human capital, while those entering would face investments in an extensive new body of Jewish knowledge and skills.7 Jews are more likely to choose such a change the lower the productivity of Jewish-specific human capital J, the lower the cost of investing in non-Jewish human capital N, and the lower the level of N required for entry into the non-Jewish group. Similarly, non-Jews are more likely to adopt Judaism the lower the cost of acquiring the minimum level of Jewish human capital acceptable to both the individual and the community.8 Ethnic human capital is thus a major determinant not only of the value of group membership but also of the cost of switching groups, enabling the movement of people between groups even as it contributes to the group’s survival by inhibiting such movement. An individual Jew faces an incentive to assimilate if the benefit of belonging to the other group exceeds the benefit of being Jewish by enough to compensate for the cost of acquiring an entirely new stock of ethnic human capital. Thus some assimilation by individuals may occur even in the most stable Jewish community. Assimilation in excess of some “normal” level stimulates the community to alter the incentives to switch, adapting Jewish practice (changing the content of J or f J) to make it relatively more attractive or to reduce its cost. A Jewish community may shrink in size as its individual members assimilate, yet it need not disappear if its institutions persist and if the remaining Jews continue to participate actively in the community. Jewish continuity is at risk when the participation by community members is so marginal that negative bandwagon effects take over and induce the remainder to switch groups.

124

Economics of American Judaism

B. Group-specific human capital Rather than theology or even individual preferences, group-specific human capital plays the key role here in determining group membership and in perpetuating group distinctiveness. The general consumption good Z is consumed by members of all groups so everyone has an incentive to invest in general human capital, G. Since J and N are human capital specific to their respective ethnic goods, non-members of the group have no incentive to invest in them. Suppose, for example, that G includes a common language used by everyone (e.g., English, German, Russian, Spanish), while Hebrew and other Jewish languages (e.g., Yiddish, Ladino) would be included in J and languages specific to another religion (e.g., Latin, Greek) or ethnicity (e.g., Basque, Patois) would be part of N. Although G, J and N differ in substance, the amount of prior investment provides a common unit that permits mutual comparability (as when “years of schooling” is used without regard to schooling content). An individual’s human capital would be relatively ethnic intensive if a large share of his or her prior investment had been allocated to ethnic-specific rather than general skills, and groups may be compared to each other with respect to the average ethnicintensity of their members’ human capital. By this criterion, Judaism would be a relatively human capital intensive ethnicity if its human capital has a relatively high rate of return within the Jewish community. Thus there is no presumption that either J or N is “better” than the other, although differences in their content can lead to group differences in the amount and relative intensity of ethnic human capital. The degree of complementarity between ethnic and general human capital would vary according to the specific properties of G.9 For given J, for example, Jews might find that in one country (or time period) they can be very successful in the general society while in another they find that their Judaism is a handicap. Differences between J and N may also affect investments in G, with potentially far-reaching consequences for ethnic differences in economic behavior. Suppose, for example, that Jews have an ethnic language – Hebrew – that is written but not spoken, while members of the non-Jewish group have an ethnic language that is spoken but not written. If bilingual literacy raises the productivity of formal education more than bilingualism per se, Jewish men would be more efficient than non-Jews as students of general subjects. This suggests one hypothesis that might explain why Jewish men were so often disproportionately represented in professions requiring high levels of secular education. Mutual complementarity among individuals, expressed by the variables qJ and N q , provides another mechanism for group differences in ethnic human capital to generate differences in general consumption patterns. Ethnic homogeneity within the family is efficient for the home production of ethnic experiences (e.g., celebrating religious holidays or life cycle events) and ethnic human capital formation (e.g., childrearing). Fluency in Hebrew, or in any ethnic language, would

The economics of Jewish continuity

125

yield greater benefits if other members of the family and community are also fluent. Similarly, Jewish scholarship among relatively few people can benefit the entire community and raise the efficiency of Jewish consumption even for those who are not scholars themselves. By the same token, a heterogeneous family is less efficient and has correspondingly less incentive to invest in ethnic human capital. If too many group members are marginal in the sense of having little ethnic human capital, active participation in the community is less rewarding for everyone and the ethnic good is correspondingly less desirable.

III. General human capital and Jewish continuity The stock of general human capital available to a given individual, G, is actually a portfolio of acquired attributes that enhance productive capacity in the workplace, the home, or both. It includes skills arising from education and training as well as those derived from work or life experiences. It also includes investments in language, social skills, household formation and childbearing. Health is another form of human capital for which prior investments play an important role. Each of these is both a substitute and a complement to all the others: substitutes because the competition for investment resources requires making tradeoffs among them and complements because higher levels of one type of human capital typically raises the payoff to investing in the others (Schultz 1997). An important consequence of mutual complementarity is that the various types of general human capital tend to be positively correlated across individuals. People with high education levels tend to invest more in job training, languages, health and medical care, and geographic mobility, for example, not simply because they have higher incomes but more importantly because each of these other investments enhances the value of an education.10 If formal schooling was uncommon in the non-modern world, marriage and family decisions that entail greater investments (e.g., longer marital search, fewer children and quality childcare, higher investments in health) may be indirect indicators of unobserved human capital investments that would have raised payoffs and otherwise facilitated these behaviors. The same principle leads to the expectation that ethnic human capital, J or N, is also a bundle of mutually complementary attributes. Jewish human capital formation begins early in life with childhood experiences and training by parents, other family members, and neighbors in the Jewish community. Judaism itself provides the context for this with the observance of everyday ritual, holiday celebrations and life-cycle ceremonies. But the lessons learned in this environment go well beyond religious observance, including not only the ethnic folk culture (e.g., cuisine, music and art, songs and stories) but also patterning for adult social roles (e.g. relationships between spouses and siblings, childrearing practices, treatment of the sick and elderly). These are then supplemented and enriched by religious training per se, just as familiarity with specifically Jewish ethnic experience facilitates and enhances that training.

126

Economics of American Judaism

A. Complementarities with Jewish human capital There are many different Jewish subcultures in the world at a given time, and many more when the frame of reference is extended through history, so generalizations about the nature of Jewish human capital must be limited to those common attributes that effectively identify Jews as a single group. Central to this common core is Torah, a literature giving Jews their nickname as the “People of the Book.” In its narrowest usage the Torah refers to the first five books of Scriptures (the Bible), inscribed by hand on a parchment scroll in its original Hebrew. This document describes the common origins (mythic or actual) of the Jewish people along with its religion, its calendar of religious observance, social structure, and the outlines of religious ritual. In broader usage Torah refers to an entire body of work which includes the Scriptures and the Talmud, a compilation of Biblical exegesis and interpretation composed in Aramaic and Hebrew over a period of some 1,500 years beginning in antiquity. The Talmud is written as a commentary on the original Torah and is thus not viewed as a truly independent work. Yet it documents changes over time in Jewish law and practice to the point where many modern religious observances and customs have Talmudic rather than Biblical origins. Its structure as a series of “legal” opinions, including one or more dissenting views by contemporaries and reviews by scholars living centuries later, underlines the process for changing Jewish practice even as it emphasizes an unbroken link with ancient law. The Talmud is thus not only a compendium of religious doctrine, but also a manual guiding the adaptation of Judaism to changes in the social and economic environment. Judaism’s emphasis on the study of Hebrew religious texts makes it a relatively human capital intensive religion, requiring not only familiarity with a second language (Hebrew) but also literacy and fluency to the point of textual analysis. While not everyone who practiced Judaism could reach such a high level of fluency, basic Hebrew literacy was the norm for Jewish men and familiarity with the Hebrew texts was common.11 In countries where Jews also spoke an ethnic language in everyday life (e.g., Yiddish) they would typically be literate in both languages (since any spoken language can be transliterated into a familiar alphabet).12 Religious training beyond the rudimentary would require reasoning and analytical skills in order to study Talmud. Like literacy, these skills are readily adapted to secular activities insofar as they complement many types of general human capital and raise the efficiency (hence reducing the cost) of investment in general skills. The standard education of a Jewish man would thus foster literacy in any spoken language and raise rates of return to investment in secular schooling. This may well be responsible for the oft-noted Jewish tendency toward high levels of secular education and occupational attainment, further reinforcing their reputation as “People of the Book.” In many times and places Jewish literacy would be in striking contrast to neighboring groups where literacy was reserved for an elite, being rare among the common people and even rarer for ethnic languages. Even in a context of general literacy, Jewish training in analytical skills would be an advantage in the more sophisticated positions in commerce and the professions.13 Moreover complementarity among the

The economics of Jewish continuity

127

various components of general skills would raise rates of return to Jewish investments in other forms of general human capital such as health, marriage, and child “quality.” B. Complementarity and Jewish continuity Whether or not high levels of general human capital lead to a loss of Jewish identity depends importantly on the degrees of complementarity between G, J and N in a particular society. Where Jewish and general human capital were strong complements, high levels of Jewish human capital would be associated with prosperity in the larger society and Jewish culture would flower as high-achieving individuals applied their general skills in Jewish contexts. Any socio-economic environment characterized by strong complementarity between G and J could thus be viewed as especially “hospitable” to the practice of Judaism. At the opposite extreme – where G and J are such strong substitutes that socioeconomic rewards in the general society can be achieved only at the expense of Jewish experience and vice versa – the environment could be viewed as “antagonistic” or even hostile to Judaism. A “neutral” environment would be one where the general society neither rewards nor punishes those who participate actively in the Jewish community, suggesting not only indifference but also relatively little interaction between general and Jewish experiences.14 While there would always be individuals exhibiting contrary behavior, Jews living in a hospitable environment (in the sense that G and J are strong complements) would have little economic incentive to assimilate. Ordinary Jewish life would reinforce secular success, so the positive rewards to Judaism would come not only internally and from within the community but also from the outside world. Incentives to marry within the community would be strong, for the members of a homogomous family generate mutual complementarities for each other that further enhance the productivity of Jewish human capital. Both of these incentives are independent of the culture of the non-Jewish group. A full description of the economic environment of a Jewish community requires analogous information on human capital complementarities for the non-Jewish group. Weak complementarity between N and G would cause non-Jews to invest less than Jews in general human capital, giving Jews an advantage in the economic life of the community. Strong complementarity between N and G would present mutually favorable opportunities for between-group mixing without leading to assimilation or intermarriage. While a Jewish community in this situation might well modify its practice to conform to patterns in the general society, these would generally seek to enhance complementarities between G and J and thus strengthen rather than weaken the quality of Jewish life. Graphical illustration. Figure 10.1a presents a schematic picture of human capital investments in a hospitable economic environment. The horizontal axis measures the stock of Jewish human capital, the vertical axis measures the stock of general human capital, and each individual is represented by a point in this (J,G) space. Society as a whole would appear as a scatter in this space, the oval shapes in the graph indicating the expected locations for the center of a scatter. Non-Jews

128

Economics of American Judaism

are expected to invest in G and N but not J; the location of their scatter in (J,G) space reflects the absence of J by being a vertical oval close to the G axis.15 The hospitable environment is shown by strong complementarity between Jewish and general human capital, giving a decidedly positive slope to the oval representing the Jewish scatter. In this environment the Jews with the most in common with non-Jews – the ones most likely to intermarry – are those at the bottom of the educational ladder, with the poorest prospects for economic success and the lowest levels of Jewish human capital. Figure 10.1b uses the same graph to illustrate the other extreme case where incompatibility (for whatever reason) leads to tension between full participation in the general society and in Jewish life. Whether the antagonism comes from outside or from within the Jewish community, the investment incentives faced by individual Jews encourage specialization in G or J rather than development of a balanced human capital portfolio. The oval representing non-Jews remains vertical near the G-axis, but in this case the oval representing Jews has a negative slope. Active participation in Jewish life is associated with little general human capital, leading not only to relative poverty but also to parochialism within the Jewish community.16 The wealth and sophistication of those with high levels of G would be accompanied by low levels of Jewish human capital and hence low attachment to the Jewish community. In contrast to the previous case, here the most educated and prosperous Jews would face the greatest incentive to assimilate, whether through outmarriage or by adapting Jewish practice in ways that de-emphasize the importance of investments in specifically Jewish human capital. The “Jewish ovals” in the two panels of Figure 10.1 illustrate extreme cases where the correlation between G and J are unambiguous and consistent. For any given Jewish community, however, the slope, width and density of the scatter-plot General human capital

General human capital

Nonjews

Jews

Jews

Nonjews

Jewish human capital (a) Hospitable environment (strong complements)

Jewish human capital (b) Antagonistic environment (strong substitutes)

Figure 10.1 Complementarity between Jewish and general human capital.

The economics of Jewish continuity

129

of its members could vary with conditions in the general society as well as customary Jewish practice. For example, the Jewish scatter might be broadly distributed throughout the space, it might appear vertical if Jews tend toward a common level of Jewish experience or horizontal if the Jewish community is fairly homogeneous with regard to its secular education. The observed correlation between G and J would be zero for each of these cases, illustrating different outcomes consistent with a “neutral” cultural environment. If Judaism is defined with respect to its human capital, Jewish continuity requires that a significant portion of the community be found toward the right of its Jewish oval, regardless of its slope in (J,G) space. Yet poverty makes the group vulnerable to everything from the temptations of success in the outside world to the predatory behavior of outright enemies, and the survival of an impoverished community might depend crucially on its high birth rates. In the case illustrated by Figure 10.1a, the natural leadership of the Jewish community would be drawn from the wealthy, the scholarly and the Jewishly committed, ideally all three attributes combined in the same persons or at least within the same families. In the case illustrated by Figure 10.1b, the natural leadership of the Jewish community would be split between the wealthy and the scholarly, typically not the same persons. Jewish survival would be fully compatible with small families and high secular achievement in the first case but not in the second. Thus the conditions for Jewish continuity depend crucially on the nature of the socioeconomic environment and the complementarity between general and Jewish human capital. Some evidence. The historical record regarding actual complementarities between Jewish and general human capital is both varied and sparse. Although a systematic examination is well beyond the scope of this paper, a brief review of late antiquity and early medieval history contains evidence for nearly all of the possibilities considered here (Adelman 1998). This suggests that despite the difficulties experienced by many Jewish communities, there must have been some economic environments that were “neutral” and others that were strongly positive. Using the human capital model as framework for interpreting the evidence, a supportive economic environment can be inferred for any Jewish community characterized by a strong positive correlation between Jewish and general human capital. Medieval Europe is often thought of as a dark period in Jewish history, yet it also witnessed a flowering of Jewish experience in virtually every dimension. The general culture was dominated by Christianity, with adverse attitudes toward Jews that are well known, but it also placed a high value on religion per se and often made accommodations to its Jewish communities. Medieval Jewish society “ . . . accorded highest social status only to men who combined religious learning and piety with commercial talent and political wisdom” (Glick 1999, p.65). Among the Jews of Ashkenaz (in the Rhineland and Eastern Europe) “ . . . the scholarly achievement of sages like the Tosafists – and of Rashi, too, for that matter – should not allow us to forget that frequently these learned men were also the political heads of their respective communities” (Stow 1992, p.149). The prominence of Jews in the Mediterranean world suggests an even stronger

130

Economics of American Judaism

positive correlation between G and J during the flowering of Sephardic Judaism in medieval Spain and North Africa (Gerber 1992). This suggests that many Jewish communities throughout the Middle Ages must have existed in a generally hospitable socioeconomic environment in the sense that is illustrated by Figure 10.1a. With the breakup of medieval society, anti-Semitism and related anti-Jewish behaviors became more dominant features of European culture so that prominence in Jewish life became more of an impediment to secular success. These changes in the general society and its human capital effectively undermined its compatibility with Jewish life, altering the socio-economic environment to look more like Figure 10.1b. Post-medieval European Judaism responded in part by turning inward upon itself, and its Jewish communities became places where piety and poverty seemed “natural” companions. This was much less common in the Ottoman world, where positive complementarities between Jewish and general education survived in a more hospitable environment. For example, . . . the Iberian model of rabbinic leadership, the scholar adept in both Hebraic and secular learning, became the Ottoman ideal as well. The traditional Sephardic pattern of lay leaders – merchants, physicians, diplomats – dominating community affairs also continued. . . . New schools of higher Jewish learning soon dotted the Ottoman map. The most famous, the Yeshiva in Salonika known simply as the Talmud Torah, was founded in 1520 by Sephardic exiles and would function for four centuries. The pride of the entire community, the school was noted for a cosmopolitan student body drawn from all over the Empire and Italy, and for a broad curriculum that included Talmudic and Hebraic studies, Greek and Latin, medicine, astronomy, and the natural sciences. (Gerber 1992, pp.162, 169) While Ashkenazi Jewish culture developed in an atmosphere of economic poverty and political vulnerability, where secular knowledge seemed to threaten Jewish scholarship, Sephardi Jewish culture would expect an educated person to combine advanced learning in general subjects with Jewish study. The model developed here suggests that this divergence arose less from differences in the level of persecution – after all, Sephardi Judaism survived the long and devastating experience of the Spanish Inquisition followed by the 1492 Expulsion – but rather from differences in the compatibility between their Jewish human capital and that of the general society in their respective countries.

IV. The quality of the Jewish environment From the perspective of an individual Jew, the quality of the Jewish environment (qJ) has been modeled to depend primarily on the amount of the Jewish ethnic good consumed by relatives and neighbors. By raising one’s own incentive to consume more of the Jewish good, an investment in Jewish human capital also enhances the Jewish environment of other family and community members and

The economics of Jewish continuity

131

leads to higher Jewish investment and consumption levels on their part. This has implications in turn for improving the Jewish environment of the original investor, who therefore has an incentive to further increase Jewish consumption. These “bandwagon effects” are especially important within the family, where Jewish human capital is characterized by strong interpersonal complementarity, but they are a general characteristic of the entire Jewish community and play an important role in its coherence as such. Within the family this property raises the benefit of homogomy associated with ethnic human capital and thus increases the incentive for Jews to marry other Jews. Within the community it raises the benefit of joining with others in a shared consumption pattern and thus increases an individual’s stake in the health of the Jewish community. But this same property makes Jewish consumption a groupspecific public good, thereby reducing incentives for individual Jews to allocate resources to it. This is the heart of the free-rider paradox: each individual would benefit if everyone spent more, but none has a private incentive to increase his or her own spending without reassurance that others will do the same. Previous research on the economics of religion has shown that characteristic patterns of sacrifice (destruction of resources that would otherwise be spent on general consumption) and stigma (punishment for spending too little on religion) can provide the economic incentives to increase spending on religious consumption (lannaccone 1992). By reducing the price of religion relative to that of the general good, such a system discourages participation by people with very low commitment. This has the effect of encouraging each individual member to increase consumption of the religious good because it reassures them that other members are doing the same.17 As a religion Judaism includes provisions that effectively raise the relative price of general consumption, thus stimulating demand for the Jewish good and providing an incentive for individuals to voluntarily participate in a system of otherwise costly commandments (mitzvoth) and mutual obligations. The basic system of rules specified in Torah includes a system of taxes (tithes) and sacrifices centered on pilgrimages to Jerusalem, applicable to Jews living in Eretz Israel when the Temple was functioning as the central house of worship, along with numerous commandments and proscriptions applicable to all Jews everywhere. Over the ages Judaism has adapted to a variety of Diaspora environments by adjusting the amounts and even types of group-specific taxes and subsidies, transmuting the Temple rites into a thrice-daily prayer service, and developing more stringent rules (“fences around the Torah”) for other observances. Such adjustments are made primarily through the rulings (responsa) of learned scholars and in the Rabbinical Courts, and many are included explicitly in the Talmud. Although this system is much too extensive to fall within the scope of the present analysis, the following brief review of some fundamental Jewish identifiers should suffice to illustrate the relevant economic properties. The full cost of any Jewish observance is the sum of its direct cost (expenditures of money or in-kind barter) and its indirect cost (the value of time and other foregone opportunities related to

132

Economics of American Judaism

the generation of income, present or future). The first section below discusses commandments for which the direct cost is the main component, and the second section considers additional costs imposed by time-intensive obligations. A. Goods-intensive Jewish identifiers Of all the Jewish identifiers, those with the lowest price are the visual identifiers that effectively distinguish Jews from non-Jews by prescribing variants in fashion. The most important of these are specified in Torah, and repeated in the daily prayers, along with their symbolic purpose. A small scroll inscribed with the credo of one God is to be mounted on the doorposts of a Jewish home (mezuzah). A Jewish man binds a similar scroll upon his arm and forehead while saying the weekday morning prayer (tfillin), wears a special fringe on his garment to remind him to follow Jewish law (tzitzit), and is circumcised in infancy as a symbol of the covenant between God and Abraham (brit milah).18 Each of these mandated symbols is a daily personal reminder of group membership. They involve little or no time and their out-of-pocket costs are quite low, so they are generally affordable for Jews of all income levels regardless of where they live and work. The indirect costs imposed by these regulations vary considerably by time and place. They would be negligible in a hospitable or neutral environment where there is no penalty to being Jewish, but the indirect costs might be high in a hostile environment where Jews are taxed disproportionately or otherwise penalized by law or custom. It is thus noteworthy that each of these identifiers is discreet without being hidden, personal reminders readily observed by other members of the family or community but not necessarily noticed by outsiders.19 Infant male circumcision is unusual in that it is irreversible – that is, beyond an individual’s control – but it is also a very private symbol rarely observable by others. Yet even this may have a high indirect cost if a hostile general society is one that encourages male nudity, an important concern in the Hellenistic world where Jewish athletes were ridiculed for being circumcised and thus excluded from certain occupations and social strata. While identifiers of this sort are common to all Jews without regard to wealth, education or social standing, their importance for Jewish continuity is inversely related to the level of Jewish human capital. This is because group-specific human capital is itself an identifier that powerfully differentiates Jews from non-Jews. In a community with the environment illustrated by Figure 10.1a, symbols of this sort would help poorly educated low-income Jews resist a passive drift toward assimilation. In the case illustrated by Figure 10.1b, however, Jewish identifiers could interfere with the high income and social status that a general education might otherwise confer. This greatly increases the full cost of these apparently inexpensive identifiers and leads to a positive correlation between secular achievement and assimilation rates. B. Time-intensive Jewish identifiers The Jewish identifiers with the highest cost may be those imposing restrictions on food (kashrut) and work (Shabbat and certain holidays), thereby transforming

The economics of Jewish continuity

133

these critical aspects of general consumption into activities with a large Jewish-specific component. Jewish dietary law limits the type of animal that can be eaten, restricts acceptable methods of slaughtering those animals, and forbids combining meat and dairy products in the same meal – even to the point of maintaining separate dishes and kitchen utensils for meat and dairy foods. Any additional production costs imposed by these restrictions are largely passed on to consumers in the form of higher meat prices. The indirect cost of kashrut observance might be much higher than the direct cost, however, since it requires that all food be prepared and served following proper procedures. An individual Jew would find these practices far less costly within a Jewish community where kashrut observance is the norm than in a non-Jewish environment where it is not, a clear case of interpersonal externalities affecting the quality of the Jewish environment. The externality would be even greater within the home where most meals are eaten, whether routinely or as part of a holiday celebration. Jewish dietary laws thus serve not only as an identifier but also as a tax on socializing outside the community and an implicit subsidy of religious homogeneity in Jewish households. Sabbath observance requires refraining from all income-producing activity on the seventh day of the week.20 This may or may not be a binding constraint on the total amount of work. If it is binding on total work time, Sabbath observance is effectively a sacrifice – that is, a “tax” that destroys labor by requiring time to be reallocated to less-valued activities. Even if not binding, however, there is an incentive to reallocate the more time-intensive Jewish consumption activities – communal prayer, Torah study, interacting with family members, socializing – to coincide with the Sabbath. Thus Sabbath observance enhances the quality of the Jewish environment by increasing the concentration of Jewish-specific consumption on the same day for all members of the family and community. The indirect cost of observing the Sabbath derives from its restrictions on the use of time, while the indirect cost of following dietary laws derives primarily from an incentive to avoid certain business or social situations. In contrast to the low time-intensity identifiers with relatively fixed out-of-pocket expenditures, these characteristics cause the cost of observance to vary among individual members of the community. As a first approximation, suppose that the level of Jewish human capital is positively associated with the productivity of Jewish-specific consumption and that the level of general human capital is positively associated with both forgone earnings and non-labor income. People with high levels of general human capital would have the highest forgone earnings, making observance of Shabbat and kashrut more costly (a price effect), but if they also have the highest non-labor income their time and money budgets might be less constrained (an income or wealth effect). In a community illustrated by Figure 10.1a, with a Jewish culture developed in a hospitable environment, Jews in this situation would also have the greatest productivity for consuming the Jewish good and the net cost of Shabbat observance need not be related to education and income levels. In a Jewish community illustrated in Figure 10.1b, however, Jews for whom indirect costs are highest would have the lowest levels of Jewish human

134

Economics of American Judaism

capital and thus gain the least benefit from Jewish observance. Such a community would be characterized by a clear gradient in the cost of observing Shabbat and kashrut, ranging from fairly inexpensive for persons in the lower right of the “Jewish oval” to very expensive for those in the upper left. The importance of indirect costs for these Jewish identifiers also makes them more sensitive to the interpersonal externalities affecting the quality of the Jewish environment within the group and, even more, within the household. This compounds the relative inefficiency of mixed marriages, for the benefits are greater and the indirect costs lower when kashrut and Shabbat are consumed jointly by all household members. It also gives the Jewish community as a whole an incentive to be less tolerant of violations by individual members, possibly to the point of enforcing observance with various formal and informal sanctions. C. Identifiers, Jewish human capital and Jewish continuity Costly identifiers serve to weed out marginal participants in the Jewish group, leaving only those sufficiently committed that they are willing to bear the cost. Their economic function is thus to raise the quality of the Jewish environment for the group’s members, leading them to consume more of the Jewish good and invest more in Jewish human capital. They thus contribute selectively to the group’s attrition in a way that improves the chances of its survival as a group. The effectiveness of Shabbat, kashrut, and other time-intensive observances for retarding assimilation varies inversely with an individual’s level of Jewish human capital. This is mainly because group-specific human capital is itself an important identifier that increases participation and carries a strong incentive for homogomous marriage. People with high levels of Jewish human capital may derive other, group-related benefits from these identifiers. However, the costs and benefits of assimilation (that is, of switching to the non-Jewish group) would be dominated by human capital considerations and are unlikely to be swayed by the much lower costs of other identifiers. Among persons with little Jewish human capital the identifiers are much more important in determining the cost of being Jewish. Moreover time is valued more highly by high-wage people, making the time-intensive identifiers more costly for Jews with high levels of general human capital. The costs of Shabbat and kashrut observance are especially high for people with high levels of general education. In a community where Jewish and secular education go hand in hand, as illustrated in Figure 10.1a, people with low levels of Jewish human capital also face a low cost of observance and they benefit from the favorable Jewish environment fostered by the active participation of others. If secular and Jewish achievements were incompatible, as illustrated in Figure 10.1b, the cost of the time-intensive Jewish identifiers would be especially high for the very people whose low levels of Jewish human capital make them the least efficient consumers of the Jewish good. In this case people with the highest levels of general education would have the lowest incentive to practice Judaism, to participate in the Jewish community, and to marry Jewish partners.

The economics of Jewish continuity

135

Yet it is not the general education per se that leads to assimilation but rather its association with low levels of Jewish human capital. Where Jewish human capital is high, and especially where the two kinds of human capital are mutually complementary, there is no expectation that assimilation rates be higher among the educated. The effect of general education on a community’s rate of assimilation thus depends importantly on its Jewish culture and its relationship to the general socioeconomic environment. Observance associated with the time-intensive Jewish identifiers enhances the quality of life within the community, but its effectiveness in reducing the incentive to switch groups is likely to be significant only for people with low levels of both Jewish and general human capital.

V. Conclusion This paper has developed an economic model of ethno-religious identity and used it to analyze the economic determinants of Jewish continuity. Viewing religion or ethnicity as a quasi-public good produced at home and in the community, groupspecific human capital is given a key role in determining identity as well as productivity in ethnic consumption. This is especially useful for analyzing Jews, since Judaism is a relatively human capital intensive religion and Jewish human capital formation is an important religious activity. Individuals with high levels of Jewish human capital are more productive Jewish consumers, and those with little Jewish human capital have less to lose if they leave the community. Jewish continuity is defined as the consequence of voluntary participation in Jewish life at least to the point of ensuring the intergenerational transmission of Jewish human capital. Within-group interactions among Jewish consumers give everyone a stake in the quality of communal life, but they also generate incentives to enhance the group’s cohesion by discouraging marginal participants. Jewish consumers with low levels of Jewish human capital are most likely to be in this situation and thus are most vulnerable to choices that involve assimilation. For a Jewish culture developed in an hospitable environment assimilation is more likely to be chosen by the poor and uneducated, but for a Jewish culture developed in an antagonistic environment it is the wealthy Jews with high levels of general education and culture who are more likely to assimilate. A cursory review of the historical record provides examples of both of these extreme situations and suggests some intermediate possibilities as well. It is hypothesized that the human capital model developed here provides a useful framework for closer investigation of the conditions surrounding Jewish survival and assimilation. The paper concludes with a consideration of the cost structure of some basic Jewish identifiers. In keeping with the nature of religion as a quasi-public good, costly identifiers retard assimilation by enhancing the efficiency of Jewish good production for each individual community member. Jewish human capital itself is the strongest identifier and has the greatest effect on Jewish continuity even apart from its definitional centrality. A second category includes practices such as dietary laws and Sabbath observance where indirect costs (especially the cost of time) typically dominate the direct (money) costs. While any Jewish identifier

136

Economics of American Judaism

might have high indirect costs if the general society stigmatizes Jews, these behavioral identifiers have intrinsically high costs that fall disproportionately on individuals living, working or socializing outside the Jewish community. The actual content of Jewish human capital is barely discussed in this paper beyond the basic requirement that it be specific to Judaism and Jewish life, although this is surely an important topic. Of particular interest for analyzing the forces of assimilation and Jewish continuity is how the content of Jewish human capital relates to that of general human capital in the larger society. Individuals with the weakest attachment to the community, and thus the strongest incentive to choose a path leading to assimilation, are those with the lowest levels of Jewish human capital. The level of general human capital is not itself a predictor of the economic incentives to assimilate, but if Jewish and general human capital are strong complements or substitutes this distinction may be masked by a very high observed correlation between them.

Notes † Earlier versions of this paper were presented at the International Conference on Economics of Judaism and Jewish Observance, December 13–15, 1998 (co-sponsored by Bar-Ilan University and the University of Illinois at Chicago) and at the 1999 meetings of the Association for Jewish Studies and the Society for the Scientific Study of Religion. The author is grateful for helpful comments from several participants, especially Yehuda Don, Tikva Lecker, Linda Waite and Barry R. Chiswick, as well as Rela Mintz Geffen. Any remaining inadequacies are the responsibility of the author alone. 1 An economic history of American Jewry, still responding to incentives for both continuity and assimilation, is developed elsewhere and served as the inspiration for the present analysis (C. Chiswick 1995; C. Chiswick 1999). 2 The focus on Jewish human capital may be contrasted to an alternative model where Jewish cohesion is a self-preserving “tribal” response to anti-Semitism, yielding no obvious benefit in a truly friendly environment (Lipset and Raab 1995). However, this view is too limited to be consistent with the richness and depth of Jewish culture, and the historical record contains many important counter-examples where Judaism has survived and even flourished in non-hostile social environments. 3 A “public” good is one that is necessarily consumed jointly by everyone without being diminished thereby and without the possibility of exclusion, as in “clean air” or “national security.” Iannaccone describes the religious good as “quasi-public” because these properties are only applicable to adherents. That is, it is possible to distinguish between members and non-members, but among members there is no exclusion. For an application of this model to the case of contemporary Jewry see C. Chiswick (1996); B. Chiswick and C. Chiswick (2000). 4 The convexity properties of a function are determined by the signs of its first and second derivatives. A production function has “the usual” convexity properties as long as it is consistent with the economic “law” of diminishing marginal product. That is, a given increase in an input xk will raise the amount of Z that can be produced when all other inputs are held constant (gx0); the size of this increase declines as more xk is brought into use (gxx0), but it rises with the amount of such other inputs as human capital (gxG0). 5 See previous footnote. 6 In an unrestricted market the free-rider problem leads each individual to purchase sub-optimal amounts of a public good.

The economics of Jewish continuity

137

7 Like any migration or switching decision, changing groups entails an implicit depreciation of origin-specific human capital and a high rate of return to new investment specific to the destination group. 8 Since few religions are more human capital intensive than Judaism, the cost of entry is typically much greater than the cost of exit. The small number of converts relative to assimilating Jews is thus consistent with cost incentives despite the model’s formal symmetry. 9 In some respects general and ethnic human capital are alternative (substitute) means for achieving the same ends, but in other respects they are mutually reinforcing (complementary). The two kinds of capital are said to be “substitutes” if the former properties dominate to the point where investments tend to be negatively correlated. If the latter dominate they are “complements” and tend to be positively correlated with each other. 10 Operationally, this means that educational attainment can be used as a proxy indicator for an entire portfolio of general human capital. 11 The first step in the religious training of young Jewish boys involves learning the Hebrew alphabet, a practice that dates back to antiquity. For fascinating discussions of this and other aspects of Medieval Jewish literacy training, including some references to the literacy of Jewish girls, see Kanarfogel (1992); Marcus (1996). 12 The most common European Jewish languages are Yiddish and Ladino, both of which are fully developed languages with their own literatures. Originating sometime in the twelfth or thirteenth centuries, one or the other of these was the mother tongue for the great majority of European Jews as recently as the nineteenth century, and in some places the twentieth. Other Jewish languages were more limited in time, space, and linguistic sophistication, some being little more than a local language written phonetically with the Hebrew alphabet. 13 In a comparison of various ethnic groups in the United States during the twentieth century, Jews were found to have the highest rates of return to investments in schooling, and the differences were highly significant (B. Chiswick 1988). If the hypothesis in this paper is correct, this finding should be much less significant for younger cohorts whose Jewish education included little if any analysis of traditional texts. 14 Modern American Jewry generally views itself as having a friendly environment, especially in comparison with the obvious hostility faced by their European forebears (Lipset and Raab 1995). Yet there are many points of tension surrounding Jewish observance, arising in part because of intrinsic incompatibilities (e.g., as imposed by differences in the secular and Jewish calendars) and in part because of indifference (or ambivalence) in the majority culture. The human capital analysis in this paper thus suggests that Judaism’s cultural environment in America may be more aptly characterized as “neutral” than “hospitable.” 15 A full diagram of the model would require a third dimension to graph the amount of N embodied in each individual. If the value of J for non-Jews is close to zero, their oval representation would be on a plane where G is graphed against N on the horizontal axis. The present two-dimensional diagram shows the projection of this oval onto the (J,G) plane. 16 Parochialism implies an emphasis within the Jewish community on precisely those aspects of Judaism that are especially incompatible with G. 17 The standard approach to a “free-rider” problem is to remove public goods from the market to the government sector, financing them with some sort of tax that is independent of an individual’s consumption of the public good. This solution is rarely available to a religion-based group. 18 The kipa (skullcap, yarmulke) worn by Jewish men in the presence of God (that is, everywhere) is a similar kind of identifier. Although not specifically mentioned in Torah, it is a widespread custom that dates at least from the late Middle Ages. 19 Insofar as the symbolism of these identifiers is a form of Jewish human capital, Jews are more likely than non-Jews to notice them as significant. Jews in various times and places also faced externally-imposed legal requirements that they wear special clothing

138

Economics of American Judaism

(esp. hats or badges), live in certain neighborhoods (ghettos), or engage in certain occupations. These served to identify Jews to non-Jews and were usually associated with high indirect costs that raised the price of Jewish relative to non-Jewish ethnic consumption. 20 This day must be the seventh on the Jewish calendar, a rigidity that can sometimes prove costly. It precludes, for example, allocating days of rest among individuals so as to permit continuous operation of a business. It also precludes a community from selecting the least-cost day for its Sabbath observance.

References Adelman, H. (1998). JUICE Medieval History. (Jewish University in Cyberspace). www.wzo.org.il, World Zionist Organization. Azzi, C. and R. Ehrenberg. (1975). “Household Allocation of Time and Church Attendance.” Journal of Political Economy. 83: 27–56. Becker, G. S. (1981). A Treatise on the Family. Cambridge, MA: Harvard University Press. Chiswick, B. R. (1988). “Differences in Education and Earnings Across Racial and Ethnic Groups: Tastes, Discrimination, and Investments in Child Quality.” Quarterly Journal of Economics. 103: 571–597. Chiswick, B. R. and C. U. Chiswick. (2000). “The Cost of Living Jewishly and Jewish Continuity.” Contemporary Jewry. 21: (forthcoming). Chiswick, C. U. (1995). “The Economics of American Judaism.” Shofar. 13(4): 1–19. ———. (1996). “Israel and American Jewry in the Year 2020: An Economic Analysis.” The Macro Scenarios: Israel and the Jewish People. A. Gonen and S. Fogel. Haifa, The Technion: 257–272. ———. (1999). “Economic Adjustment of Immigrants: Jewish Adaptations to the United States.” Jews in America: A Contemporary Reader. R. R. Farber and C. I. Waxman. Hanover, NH: Brandeis University Press: 16–27. Gerber, J. S. (1992). The Jews of Spain: A History of the Sephardic Experience. New York, NY: The Free Press. Glick, L. B. (1999). Abraham’s Heirs: Jews and Christians in Medieval Europe. Syracuse, NY: Syracuse University Press. Iannaccone, L. R. (1988). “A Formal Model of Church and Sect.” American Journal of Sociology. 94 (Supplement): S241–S268. ———. (1992). “Sacrifice and Stigma: Reducing Free-riding in Cults, Communes, and Other Collectives.” Journal of Political Economy. 100(2): 271–291. Kanarfogel, E. (1992). Jewish Education and Society in the High Middle Ages. Detroit, MI: Wayne State University Press. Lipset, S. M. and E. Raab. (1995). Jews and the New American Scene. Cambridge, MA: Harvard University Press. Marcus, I. G. (1996). Rituals of Childhood: Jewish Acculturation in Medieval Europe. New Haven, CT: Yale University Press. Schultz, T. P. (1997). “Assessing the Productive Benefits of Nutrition and Health: An Integrated Human Capital Approach.” Journal of Econometrics. 77: 141–158. Stow, K. R. (1992). Alienated Minority: The Jews of Medieval Latin Europe. Cambridge, MA: Harvard University Press.

Part V

Israel and American Jewry

11 Impact of the Six-Day War on American Jewry* An economic perspective

I. Introduction The success of Israel’s armed forces in June 1967 provided a dramatic closure to what in retrospect may be seen as two decades of transition in the American Jewish community and its relationship with Israel. Economic and social penalties associated with open Jewish identification in America had been declining throughout the post-WWII period. At the same time, American Jewish support for the State of Israel had been growing in depth and breadth, well beyond membership in explicitly Zionist organizations. Events leading up to the Six-Day War, were perceived as a highly credible threat to Israel’s continued existence thus stimulated widespread alarm which received dramatic public expression during the War itself. The success of Israel’s armed forces in June 1967 tapped a reservoir of latent Jewish self-esteem, clearly reinforced by the magnitude and finesse of the Israeli victory, and altered the costs and benefits of being Jewish in both communities. The cost of being Jewish may be viewed as having three components. There are money expenditures on goods and services devoted to specifically Jewish activities (as, for example, Jewish artifacts and synagogue membership fees), referred to henceforth as “Jewish goods.” There is the time cost of two specifically Jewish activities (as, for example, the opportunity cost of time spent in the synagogue or on holiday observance), referred to henceforth as the cost of “Jewish time”. Each of these costs affects the daily decisions about participation in Jewish activities. In addition, there are costs associated with leading a publicly Jewish life (for example, wearing a kipa, observing kashrut, observing Shabat), referred to henceforth as the cost of an explicitly “Jewish lifestyle.” Although there may be time and money costs associated with these Jewish lifestyles, the main cost is the foregone income that arises as a result, whether because of outright discrimination in schools or at work or because of voluntary career path adjustments required for compatibility with Jewish observance.

* Unpublished paper presented to the International Academic Conference on The Six-Day War and Communal Dynamics in the Diaspora, Jerusalem, December 1994.

142

Economics of American Judaism

This paper analyzes the economic impact of the Six-Day War on the economics of being Jewish in the United States, with a focus on the flows to Israel of both money and people. Part II briefly summarizes long-run trends in the cost of being Jewish in the United States and highlights some of their implications for American Jews. Part III discusses economic forces underlying the relationship between American Jews and Israel and analyzes the evolution of those forces since independence. The impacts of the Six-Day War are assessed in Part IV, focusing on how that event altered the costs of being Jewish in the U.S. and Israel and hence on the relationship between American Jews and Israel. Part V presents a brief summary of conclusions.

II. The cost of being Jewish in America The labor force in the United States after World War II was quite possibly the most productive, and hence the highest paid, in the history of the world. Specific causes of this phenomenon are beyond the scope of this paper; it was the culmination of a period of rapid economic development during which Jewish immigrants and their offspring were enthusiastic and effective participants. Although few American Jewish families had much wealth other than that derived from the earnings of labor (including small business), these earnings were unprecedentedly high and by the 1960s the community as a whole had become very comfortable indeed. Much of this “success” story of American Jews was attributable to very high levels of secular education compared to most other American religious and ethnic groups. Nearly two-thirds of all Jewish men were working in high-level occupations (that is, occupations classified as professional, technical, or high-level management). Jewish women achieved notably higher levels of schooling than most non-Jewish women, and the younger cohorts were already “catching up” to the educational and occupational achievements of Jewish men. The educational expectations of Jewish parents for their children, both boys and girls, were similarly high, leading to intergenerational stability in the pattern of high-level occupations and earnings which was already well-established by 1960 and continues to the present. As the pressures of poverty and immigrants’ adjustments become a thing of the past, religious participation is generally expected to rise. This is because religion may be understood as a “normal” consumption good, the demand for which increases with income, other things being the same. Among American Jews this took many forms, including expansion of the Conservative and Reform movements, emergence of ubiquitous after-school Hebrew programs, and construction of new synagogue buildings with Jewishly-expressive designs. Yet because of high wage rates, the Jewish community was one in which time had become very expensive. Thus the forms of religious participation which most appealed to American Jews were those which involved less Jewish time, resulting in the apparent paradox of reduced participation in time-intensive Jewish activities during a period of expanding Jewish expression.1 To the extent that the rhythms of Jewish observance conflict with those of a secular career, the inherent cost of a Jewish lifestyle would be higher the higher the

Impact of the Six-Day War on American Jewry: an economic perspective

143

foregone earnings. From the traditions of mourning to the observance of kashrut, the lifestyle of an observant Jew frequently would not be synchronous with secular schedules and would thus impose a high cost on Jewish professionals. Thus the rise in education and earnings among American Jews was accompanied by adaptations in the rhythms of Jewish life, as for example with the conducting of “late” services on Friday evening. The number of major, non-working holidays was severely curtailed (typically limited to Rosh HaShanah, Yom Kipur, and the Seder nights), while others (as, for example, Chanukah and Purim) were effectively transformed into children’s holidays. Evasion of expensive Jewish observance, especially among men, was often accompanied by a desire to keep one’s Jewish self discreetly separate from the world of work. This may have been especially important in the decades of upward Jewish mobility, when anti-Semitism (either overt or of the “gentlemen’s agreement” variety) would have imposed a high cost on leading a public Jewish lifestyle. Even in professions not marked by anti-Semitism, however, being Jewish was not widely admired and many Jewish professionals viewed as precarious the quasi-social acceptance on which their career success was contingent. In such an environment an act as simple as wearing a kipa might have a negative effect on clients, referrals, or prospects for promotion, thus imposing substantial losses in terms of long-run earnings capability. As American Jews were becoming more established in their professions and secure in their economic life during the decades following World War II, anti-Semitism was declining in importance as a determinant of Jewish lifestyle costs. The causes of decline in American anti-Semitism are beyond the scope of this paper; it may have been the result of post-holocaust soul-searching among non-Jewish Americans, of actions taken by Jewish organizations mobilized specifically for this purpose, of increased professional contact with assimilated American Jews, of diminished importance of religion as a basis for ethnic identity and hence rivalry, or of a general decline in market-related prejudice as articulated by the Civil Rights movement and legislation of the 1960s. The establishment of the State of Israel, and the American political support of Israel, may also have contributed to diminishing negative associations with Jews. Whatever the reasons, however, by the 1960s Jewish youth would no longer have seen anti-Semitism as a major factor in their careers. As American Jews were increasingly assimilated into the professions, their economic status came to be contingent less on religious practices and more on their achievements and abilities. With this decline in lifestyle costs for Jews in secular careers would come less anxiety about “hiding” their Jewish selves, more openness in observance of selected Jewish holidays and customs, and increased public expression of support for the Jewish state in Israel. Although anti-Semitism would never completely disappear, and other components of Jewish lifestyle costs might remain high, decade by decade the American economic environment was becoming more favorable for the forces of Jewish revival.

III. The relationship between Israel and American Jews If upward mobility was the essence of the American Jewish economic experience during the first half of the twentieth century, economic stability at high levels

144

Economics of American Judaism

of achievement and earnings has been its essence during the second half. The beginning of this latter era was more or less coincident with (although probably unrelated to) the establishment of the State of Israel in May 1948. The economic forces underlying the relationship between American Jews and Israel were thus conditioned in large part by the high-wage occupations characteristic of the former. From the beginning, American Jewish support for Israel has nearly always taken the form of money rather than time. Israel was a land of pioneers, in agriculture and in manufacturing, whereas the personal ambitions of American Jews were in the professions and in what later would be labeled “technocratic” occupations. Israel was then a less-developed country with low real wages and few job opportunities in these fields, and since communication and travel between Israel and the U.S. were relatively difficult, the rate of return to migration to Israel from the United States would have been correspondingly low. Although a few American Jews volunteered for various rescue-type operations, participated in the War of Independence, and were among the early olim, their motives were typically ideological and their numbers correspondingly small. Despite the emphasis of official Zionism on aliya (Jewish immigration to Israel) and other forms of direct (i.e., time intensive) participation, the comparative advantage of American Jews was not time but money, and the American Jewish community responded accordingly. Even apart from their responsiveness to fundraising appeals by Israeli speakers, the ingathering and absorption of Jewish refugees in Israel would be accomplished by a partnership between Americans and Israelis. Israel Bonds were a successful avenue for mobilizing American financial resources, but they were not the only (or even the most popular) way for American Jews to participate in Jewish nation-building. Contributions to the Jewish National Fund for land reclamation and forestation projects in Israel, for example, and to Haddassah for the development of medical and public health improvements, became as routine an expression of Jewish identity in the United States as contributions to the local Jewish Federations. At issue here is not just the magnitude of American donations but their grassroots character: although reluctant to make aliya, American Jews contributed to the building of a Jewish homeland in ways which were compatible with their own economic environment. The nature of American Jewish financial support to Israel was thus a means of participating in the nation-building aspects of Zionism. As such, its essence has always been that of an investment rather than a charity. This phenomenon may have been obfuscated by several factors, not the least of which is a provision of the U.S. tax code whereby a “charitable” deduction effectively subsidizes any contribution to nonprofit organizations with programs for education, training, medical care, etc. Appeals for American contributions to Israel also tended to highlight the pitiful plight of refugees, the urgency of their resettlement, and difficulties associated with war and shortages in Israel. Yet despite the undoubted importance of humanitarian motives for giving, American Jewish financial contributions to Israel have always been a means of participating in the establishment of a modern Jewish state and in the rescue of imperiled Jewish communities throughout the world.

Impact of the Six-Day War on American Jewry: an economic perspective

145

For its part, Israel welcomed the financial support of American Jewry in its early decades and used it to good effect. Apart from ingathering of exiles and absorption of the new immigrants, Israel was able to build a modern economy in an extremely short time. Its rapid development of technology-based industry was aided by the establishment in Israel of world class universities and research institutes (many of them funded by American Jews) as well as by a military strategy that relied on technological rather than numerical superiority. By the end of its second decade, Israel was well on the way to joining the world leaders in several areas of research and technology. As Israel’s economy developed in this direction, the rate of return to immigration from the United States rose accordingly. With increased Israeli demand for professionals and technocrats, American immigrants would no longer have been required to give up their high-level careers. On the contrary, by the 1960s Israel was encouraging immigration of skilled Americans, their earnings were high by Israeli standards, and the non-monetary aspects of career satisfaction were improving every year. The economic incentives for aliya from the United States were thus rising, and would probably have continued to do so as Israel’s economy developed and grew. Despite the relatively high earnings that Americans could expect from Israeli jobs, their consumption level in Israel would still not match that which they could enjoy in the United States. To offset this “loss”, however, Israel offered a unique opportunity to lead an openly Jewish lifestyle without incurring heavy costs. With the decline of Jewish lifestyle costs in the United States, partly due to the decline of anti-Semitism and partly due to increased socio-economic security, American Jewry was experiencing something of a revival: a reemergence of traditional practices selected and sometimes modified to be more compatible with high-level career paths. Yet the greater the emphasis placed on traditional observance, the greater the conflict between rhythms of Jewish and secular life and hence greater the lifestyle cost of being Jewish. Within the American Jewish community, the more observant the family the greater the lifestyle costs of being Jewish and hence the greater the “savings” achieved by moving to Israel. Thus the rate of return to aliya would be higher among more religiously observant Americans, and immigration to Israel would have been stimulated by a revival of Jewish observance among Jews with high-level secular occupations in the United States.

IV. The impact of the Six-Day War The Six-Day War in June 1967 was a major event not only for Israel but for the American Jewish community as well. It was preceded by weeks of mounting tension during which Israel’s very existence was perceived to be at risk. At the onset of overt fighting there was an immediate outpouring of financial, political and emotional support for Israel, a public commitment by American Jews that went well beyond anything in previous experience. Most ordinary Americans, including Jews, had been only marginally aware of the extent of technological advance in Israel and were stunned by the finesse with which Israel’s armed

146

Economics of American Judaism

forces defeated its enemies. As new realities were absorbed and consolidated during the weeks and months that followed, economic factors were also reassessed and Jewish behaviors adjusted accordingly. As a galvanizing event, the Six-Day War tapped a latent reservoir of self-esteem among American Jews in part because of Israel’s military prowess but also, more importantly, because it demonstrated a successful commitment by Israel to the development, acquisition and mastery of advanced technology. Widely admired by all Americans but especially those in the high level occupations of many American Jews, this demonstration of Israel’s technological sophistication led to a re-evaluation of stereotypes. The rifle-toting, tractor-driving kibbutznik with a medical degree was supplanted by the high-tech scientist who could pilot a sophisticated air force jet when the occasion demands. Displaying many of the same qualities Americans valued in themselves, Israelis had risen in the esteem of both Jews and nonJews and, by reflection, the esteem in which non-Israeli Jews were held had also risen. In economic terms, this change served to enhance the benefits (or reduce the costs) of overt Jewish identification in the United States, thus reinforcing the ongoing trend towards public expression of Jewishness in secular spheres. The trend was already well under way before Israel’s victory, and indeed reached a vocal peak at the outbreak of war well before its outcome was apparent. Yet there is no doubt that the war itself was a galvanizing event, and many American Jews remember that week as a turning point in the value of Jewish identification. At the very least it marked a public acknowledgement that Jewish expression in America need no longer be hidden, that in the secular world being Jewish could be a source of pride rather than a handicap, and that Israel was very important to American Jews whether or not they affiliated with a formal Zionist movement. American Jews also found themselves reassessing the relationship between themselves and their Israeli counterparts. The importance of advanced technologies in Israel made their own skills more transferable, so that migration to Israel need not entail a major career sacrifice. Reductions in the cost of transportation and communication made it easier to maintain contact with relatives, friends and colleagues in the United States. Moreover the reduced lifestyle cost of being Jewish in America, by inducing more overt observance, effectively increased the advantage of living in Israel. Each of these changes would have increased the rate of return to aliya for American Jews, especially for the religiously observant. The Six-Day War also eroded the sense of insecurity that Americans associated with living in (or even visiting) a threatened country. Life became notably safer with the removal of hostile positions overlooking Israeli communities from the Golan Heights, the hills of Judea and Samaria, and even the walls of Jerusalem. Israel’s decisive victory and technological sophistication also inspired confidence that it could indeed withstand most subsequent threats. Among the religious, access to the holy sites of Jerusalem, Judea and Samaria substantially raised the non-pecuniary benefits of living in Israel and sparked new interest in the Jewish state. Among young American Jews, however, such territorial motives were relevant for only a negligible fraction; the improvement in Israel’s security was a far more significant implication of the change in Israel’s borders.

Impact of the Six-Day War on American Jewry: an economic perspective

147

Table 11.1 U.S. immigration to Israel 1948–1991 U.S.-born immigrantsa

Year of immigration

Total numberb 1948–51 1952–60 1961–64 1965–71 1972–79 1980–84 1985–89 1990 1991 Total

1,711 1,553 2,102 16,569 20,963 11,322 7,582 1,248 1,360 64,410

Annual average 428 173 523 2,367 2,620 2,265 1,517 1,248 1,360

Source: Immigration to Israel 1991, Special Series No. 920, Central Bureau of Statistics, Jerusalem, 1992. Table 6. Notes a Immigrants and “potential” immigrants born in the United States of America. b By way of comparison, the total Jewish population of the United States was approximately 5.5–6.0 million during this period.

Unlike other impacts of the Six-Day War on the economic relationship between Israel and American Jews, which are difficult to distinguish from the effects of ongoing trends in the economic life of Jews living in Israel and United States, the effects of increased security in Israel were unambiguously attributable to its outcome. Table 11.1 contains some figures on American migration to Israel for various periods. There is a clear discontinuity around 1967, with annual immigration jumping from an average of 523 during the early 1960s to 2,367 in the late 1960s, where it more or less remained for two decades. Although explaining the subsequent decline in the late 1980s to about half that level is beyond the scope of this paper, it coincided with a rise in the level of Arab violence and especially in the sense of insecurity which Americans associated with Israel. This suggests that while U.S.–Israel migration may have been increasing for other reasons as well, improved confidence in Israel’s security after the Six-Day War provided it with a large boost.

V. Conclusions Although the Six-Day War was a major event in the emotional life of American Jewry, the analysis in this paper suggests that many of the socio-economic changes attributed to it might have occurred anyway. Financial commitments to Israel by American Jews were evident from its inception, changing with the wealth of Jewish families and the exigencies of current events but fundamentally stable in its nature. In contrast, migration of American Jews to Israel has never

148

Economics of American Judaism

been great but has increased over the years especially among those choosing observant Jewish lifestyles. This migration appears to have received a marked boost in the years following the Six-Day War. In the early years of Israel’s independence there emerged a sort of division of labor in which the high-wage American Jewish community provided the capital and the low-wage Israeli Jewish community provided the labor for the mutual enterprise of ingathering exiles and building the Jewish state. As Israel’s economy has become more developed, and hence much more like that of the United States, the economic basis for this division of labor has been undermined. This change in economic circumstances has had fundamental implications for the relationship between American Jews and Israel, but it was well under way by 1967 and indeed may have been largely responsible for Israel’s dramatic victory in the Six-Day War. Ironically, the fact that high-wage Israelis now make substantial financial contributions to their own economy, and that their earnings opportunities (in the U.S. as well as in Israel) imply that they too have a very high value of time, has been remarked recently as a “new” development. Yet if the Six-Day War marked a turning point in American-Jewish relations, it may well be because it coincided with the emergence of Israel as a developed economy.

Note 1 The economic analysis of the American Jewish community is developed more fully in C. Chiswick, “The Economics of American Judaism”, prepared for presentation to the American Economics Association, January 1995. [A later version of this paper appears as Chapter 2 in this volume.]

12 Israel and American Jewry in the year 2020* An economic analysis

I. Introduction This paper presents an economic analysis of the relationship between Israel and the American Jewish Community and forecasts this relationship 25 years into the future. It is undertaken as part of the IL-2020 project of the Settlement Department, Jewish Agency for Israel (JAFI), and takes as given the alternative scenarios for Israel’s economic development described in that document.1 The analysis is also undertaken from a Zionist perspective: Israel is understood here as not only a political sovereignty for its own citizens but also as the Jewish State, a community within world Jewry with a unique stature and a special role derived primarily from its existence as an independent polity. The Jewish community of the United States (referred to henceforth as American Jewry) has been chosen as the focus for this study in part because it is by far the largest diaspora community during this time period and in part because its Judaism is very dynamic and presents Israel with its most serious challenge for dominance in Jewish matters. With the crises associated with Israel’s sovereignty presumably well over, its relationship with American Jewry has become critical for the identity of Israel as a Jewish State. The present study focuses on the economic factors that underlie this relationship, with particular emphasis on those factors that strengthen or weaken the ties between these two important Jewish communities. Part II considers the economic characteristics of American Jews and Part III analyzes the economics of Jewish life in the United States. Part IV covers the economics of Judaism in Israel, stressing the economic differences and similarities of these two Jewish communities. The economic links between them is discussed in Part V, where the relationship between Israel and American Jewry is fitted into the context of the IL-2020 planning model. Part VI concludes the analysis with a brief overview of conclusions and some policy implications.

* Published in Hebrew translation in Israel 2020: Master Plan for Israel in the Twenty-first Century. The Macro Scenarios. (Israel and the Jewish People. Anat Gonen & Smadar Fogel, eds.), Haifa: Technion, 1996, pp. 257–272.

150

Economics of American Judaism

II. The American economic environment The labor force in the United States after World War II was quite possibly the most productive, and hence the highest paid, in the history of the world. This was the result of a process of rapid economic development (the causes of which are beyond the scope of this paper) in which Jewish immigrants and their offspring were enthusiastic and effective participants. Thus while few Jewish families arrived in the United States with much wealth other than their own labor, their real earnings in mid-century America were higher than in any other time or place and by the 1960s the community as a whole had become very comfortable indeed.

A. Skills, education and occupational achievement Much of this “success” story of American Jews was attributable to their very high levels of secular education, both in absolute terms and in comparison with other American religious and ethnic groups. Some 20 percent of American Jewish men earned Ph.D. or professional degrees, a fraction that has remained stable for every cohort entering the labor force since World War II. The number with other postcollege (Masters level) degrees has been nearly as great, about 16 percent for cohorts prior to 1970 and 19 percent for cohorts since then. During the early decades of rapid upward mobility in the Jewish community, professional education of daughters lagged somewhat behind that of sons. Yet Jewish women achieved notably higher levels of schooling than most non-Jewish women, and about a third of the post-1970 cohorts hold post-college degrees (25 percent at the Masters level and another 9 percent at the Ph.D./Professional level). American Jewish parents appear to have high educational expectations for all their children, both boys and girls, and younger cohorts of Jewish women are clearly “catching up” to the educational achievements of Jewish men. These high levels of education are closely linked to the labor market experience of American Jews as revealed by their occupational patterns. During the postWorld War II decades some 55 percent of all American Jewish men worked in occupations classified as high-level: professional, technical, administrative or management. By the 1980s this fraction had risen to two-thirds. Whereas two out of three of these men were in the administrative or management subgroups in 1948, and one out of three were in the professional, technical and kindred (PTK) subgroup, the latter has grown steadily so that the proportions were reversed by 1990. Moreover the PTK group has greatly diversified during this period, with law and medicine accounting for more than 43 percent of all male Jewish professionals in 1948 but only 19 percent in 1990. Despite the disproportionate concentration at high levels of education and professional achievement, most American Jews work in a non-Jewish environment at occupations in which they are a small minority. Jews represent about 2.3 percent of the population of the United States and only 5.7 percent of the male labor force in the professions (4.5 percent of the men in all high-level occupations). Most American Jews work closely with non-Jews at similar levels of

Israel and American Jewry in the year 2020: an economic analysis

151

attainment, facing similar incentives and displaying many of the same consumption, investment and lifestyle choices. Yet while American Jews as individuals are very similar to their non-Jewish colleagues at work, few other communities in the United States are so concentrated at such high levels of achievement. American Jews value a professional career not only for the high earning power that it confers but also for its potentially high levels of intellectual stimulation, social satisfaction and self-esteem. Although people in these occupations need not look to their children for upward mobility or financial security, they typically view education as their means of bequeathing a lifestyle in which such benefits are an integral part. Higher education is thus expected for all children, male and female. Jewish parents are often forthcoming with financial support, not only for schooling but also during the early years of establishing a career. Although financial independence is desired for other (non-pecuniary) reasons, parental wealth reduces the dominance of earning power as the primary criterion for choosing a profession and shifts the emphasis toward job satisfaction. Education has always had an important place in Jewish society, but it takes on some additional nuances in this economic environment. Work-related skills are acquired not only by substantial investments in high-quality schooling but also by complementary investments in such other forms of human capital as good health and social skills.2 Surrounded by high-achieving adults in their families as well as in the community, Jewish children are well supplied with positive role models, high expectations, positive feedback for their successes, and a variety of intellectual resources outside of school. Even though there is (and always will be) an important minority of Jews who are not themselves such high achievers, a Jewish community dominated by those who are constitutes an important resource from which all of its children can benefit. In contrast to the first half of the twentieth century when American Jewry was characterized by rapid upward mobility, its education and occupation patterns now exhibit a stability that can be expected to persist for at least several generations. Jewish college students of the 1990s typically come from homes in the upper-middle-income suburbs, raised by high-achieving parents who themselves grew up in a similar environment. Sons and daughters alike have been sent to high-quality secular schools, and they are likely to become their family’s second, third or even fourth generation of professionals. They are well assimilated in the secular communities where they live and study, and are active participants in a wide variety of leisure and community activities. B. Economic demography: gender, age, and family structure The economic environment has important effects on demographic incentives and hence on the choices affecting family life. Most importantly, investments in education that involve training for a high-level, high-wage career increase the economic value of time and hence create strong incentives for lifestyle choices that conserve it. Education also contributes to a person’s productivity in non-work activities, increasing his or her effectiveness as consumer, spouse, parent and

152

Economics of American Judaism

caretaker.3 Since the majority of American Jewish men and women are highly educated and have correspondingly high earnings, the family patterns characteristic of this group have become typical within the American Jewish community.4 Economic incentives affect demographic choices at every stage of the life cycle. An education that continues well into young adulthood tends to delay the optimal age of marriage and family formation, extending the “adolescence and youth” phase of the life cycle and increasing the proportion of the adult community that is either unmarried or married but without children. Indeed, single adulthood is now an unprecedentedly important life-cycle stage among American Jews: in 1990 never-married singles accounted for a full 40 percent of all born-Jewish adults 25 to 34 years old. (The number of unmarried in this age group is a bit larger than this since another 5 percent are divorced, separated or widowed.) Although these young adults are free of family responsibilities, they are typically involved in establishing high-level careers and will almost all eventually marry and have children at a later age. The large number of single adults in the Jewish community is thus neither pathological, as is sometimes supposed, nor transient. Rather it is a new stage in the Jewish life cycle, symptomatic of the high education-occupation pattern characteristic of American Jews and a stable feature of the community that can be expected to persist. Economic incentives also affect the selection of marriage partners. Marriage itself may be viewed as a partnership in which each party would like his or her spouse to be as productive as possible, not only in the labor market but also in various family activities (such as consumption, parenting, caretaking). Since education contributes to productivity in these areas, the marriage “market” tends to pair men and women with (among other things) similar educational attainments and career aspirations. The professional degrees earned by women as well as men thus lead to a two-career marriage, an increasingly common phenomenon in the American Jewish community and one which is likely to persist into the indefinite future. Such marriages typically occur after schooling is completed and hence at a relatively late age, and children may be postponed even longer until both careers are under way. The parenting phase of a Jewish life cycle (which lasts for twenty years or more) thus coincides with the “prime” earning years in which labor market activities are at their most productive and hence leisure time is especially costly. Moreover raising children is an inherently time-intensive activity, especially for parents who begin to educate their children at an early age and continue well into adolescence. The high value of parental time during this period is a strong incentive to have few children, despite an income that is clearly high enough to support a large family. A high cost of time encourages the purchase of goods and services which substitute for parents’ time in routine tasks and/or complement it (that is, increase the productivity of time) in family activities, while generally discouraging time-intensive leisure and social activities. This is the economic context in which to interpret the decline in recent decades of voluntary communal activities. Working parents who are balancing career and family find it costly to donate their time and voluntarism (especially by women) in the Jewish community has fallen accordingly. But the

Israel and American Jewry in the year 2020: an economic analysis

153

older parenting age also makes it difficult to recruit prime-age (that is, pre-retirement) adults for positions of communal leadership. Lower levels of voluntarism at these ages are neither pathological nor transient, reflecting as they do a reallocation of time over the life cycle so as to enhance compatibility between work and family. The relatively late childbearing years among two-career couples means that parents will be over 50 years of age by the time their children leave home (that is, when they become less intensive in their demands on parental time) and well over 60 before they become grandparents. This phase of the life cycle is also a relatively new phenomenon in the Jewish community: during the years when their children are adult singles, parents are “empty-nesters” for whom professional productivity is still high but with neither children nor grandchildren to compete for their time. Indeed, since grown children have often followed their professional paths to other geographical locations, the arrival of grandchildren can be a strong incentive for retirement and the freedom to travel which accompanies it. In recent decades there has emerged another new group, “senior citizens” who are not only grandparents but also caretakers for their own elderly parents. The numerical importance of this group may prove to be temporary, however, arising as it does from a transition to later life-cycle timing. Suppose, for example, a woman born in 1940 to a 20-year-old mother did not give birth to her own daughter until the age of 30 and her daughter also had a first child at age 30. When her first grandchild was born this woman would be 60 and her 80-year-old mother would be dependent on her for care. Yet if all three women have their first children at age 30, the likelihood is much less of a four-generation family in which the elderly are cared for by children who are themselves retired seniors. Thus it is quite possible that this aspect of the changing American Jewish life cycle will prove to be transitory and not a major concern in the future.

III. The economics of American Judaism Despite lingering effects of the economic experience of immigrants and an upwardly mobile second generation, today’s American Jews live in a completely different economic environment. So it is perhaps not surprising that Jewish life in the United States at the end of the twentieth century looks very different than at its beginning. This is not because today’s Jews are less observant than their grandparents (which they may or may not be), or even because they are less traditional (which they also may or may not be). Rather it is because Judaism is so intertwined with acts of everyday life that the economic environment cannot help but have an impact on Jewish practices and customs.5 The United States is a religiously pluralistic society in which Jews are not only a very small minority (about 2.2 percent) but also a group which is easily assimilated. Jewish continuity thus depends on two things: the desire of individuals to practice Judaism and the distinctiveness of Judaism as a religion or the Jews as a people. Before turning to the relationship between American Jews and Israel, this analysis focuses on some implications of the American economic environment for

154

Economics of American Judaism

the practices and behaviors which characterize American Judaism today and can be expected to do so in the future. A. Religion as a home-produced good Like education, religion is desired not only for its own sake but also for the benefits that it may confer in the future. Thus it may be thought of as an intangible which can be either a consumption good or an investment.6 This religious “good” is not free since it requires time and money resources which would otherwise be available for alternative uses, but since it can not be purchased directly in the market it is best thought of as a “home-produced” good. In order to experience Jewishness, for example, a person must devote some amount of time and money to Jewish observance. The person may join a synagogue (which costs money) and attend prayer services (which requires time), may join a club and read Jewish books, or may buy candles and make the Shabbat blessings. In each case, a purchased input can “produce” Jewish experience only in combination with the time spent in a Jewish act. Two other types of inputs have an important effect on the productivity of time and money devoted to religion. Religious “capital” is the asset associated with prior expenditures on religion as an investment. Jewish religious capital takes many forms: Jewish scholarship, knowledge of music and art, family traditions, a set of attitudes about the nature of life or about the relationship between God and man are a few examples of the type of assets that enrich the Jewish experience obtained from any particular consumption pattern. Thus, for example, mastery of the Hebrew language can enhance the quality of Jewish experience obtainable at any level of current time and money expenditure. The other type of input, sometimes called “consequences” and sometimes “conduct”, has to do with aspects of behavior which are not directly associated with consumption of the religious good. For example, the extent to which Jewishness is viewed as a personal aspect of one’s private life, as distinct from a publicly visible part of one’s identity, affects both the pattern of religious consumption and also the quality of Jewish experience obtained from it. As another example, successfully applying the ethical precepts of Torah in a non-religious context (for example, at work) may enhance the positive Jewish experience derived from any pattern of religious expenditures, and failure to do so may undermine the religious value of Jewish observance. Such conduct-related choices have always been recognized as an important aspect of Jewish religious behavior. B. The relative costs of Jewish consumption patterns As a general expectation, the high incomes enjoyed by so many American Jews should be associated not only with high consumption levels but also with an emphasis on better-quality goods and services. This suggests that the demand for Jewish religion should be correspondingly great. Indeed, this is certainly the case

Israel and American Jewry in the year 2020: an economic analysis

155

(holding everything else constant!) when the American Jewish community is compared either with other Jewish communities today or with the American Jewish community of the past. Despite the popular notion that their immigrant forbears were much more observant Jews, the great spurt in synagogue building and Jewish education (Sunday schools and Hebrew programs) coincided with the upward mobility associated with moving to the suburbs. While the forces of secular enlightenment may have been met elsewhere by an increase in Jewish non-observance, in the United States it stimulated the growth of Reform, Conservative and (more recently) Reconstructionist movements into their distinctively American forms. High-income Americans have been willing to support many Jewish causes, not the least of which has been the ingathering of refugees into the Jewish State of Israel. Yet the high wage rates associated with the education and occupational structure of American Jewry make any time-intensive consumption activity correspondingly costly, and few activities are more time intensive than the Ashkenazi Jewish traditions of Russia and Eastern Europe. In contrast, the adaptations of Judaism most compatible with the American economic environment, both today and in the year 2020, would be those that conserve the time inputs required. Following the notion that Jewish experience is a home-produced good with two types of input, the relatively high cost of time provides a strong incentive to produce Jewish experience with time-saving forms of observance. There are essentially two strategies for conserving time: a reduction in the duration of Jewish activities and a rise in the productivity (quality) of activities that yield Jewish experience. Thus American Judaism favors new practices and observances that effectively substitute “quality” for “quantity” of time devoted to Jewish life. The fact that American Jews have many attractive alternatives, whether secular (leisure) or in other religions, means that Jewish activities must be similarly satisfying in order to compete for their scarce time. These market-related forces provide a strong underpinning for some of the distinctive characteristics of American Judaism. It also suggests the attraction of the American model for Jews of other countries, responding as it does to the economic incentives faced by highly educated, high-earning individuals.7 Yet there are indications (most obviously the high rates of outmarriage) that not all American Jewish innovations will stand the test of time, and the communal concern with such matters suggests a continuing process of adapting Jewish practice to its American environment. It is surely useful to search for improvements in the quality of time spent on Jewish observance, and it is relevant to consider whether there might be a critical minimum in the quantity of time necessary to generate a fundamentally Jewish experience. But changes by the year 2020 in the basic structure of American Judaism are as unlikely as changes in its underlying economic environment. C. Jewish religious capital Even in ancient times Jewish parenting responsibilities emphasized the importance of Jewish education, not only through explicit study but also informally within the

156

Economics of American Judaism

family and community and in the many opportunities provided by the observance of Jewish holidays. The traditional emphasis on Jewish education reflects the high productivity of religious capital in enhancing the quality of time spent on Jewish observance. That is, the Jewish experience obtained from a given amount of time is greatly affected by an individual’s Jewish background and knowledge, names popularly given to the Jewish forms of religious human capital. Indeed, although it is possible to practice Judaism with very little prior investment, it is far more common for a newcomer to the religion to immediately feel the need for study and learning to improve the quality of time spent. Although the American Jewish community supports many institutions of Jewish culture and learning, there are a great many American Jews for whom the stock of this religious capital is extremely low. Like most other groups in the United States, American Jewish immigrants tended to be self-selected for traits such as personal independence and impatience with, if not rebelliousness towards, the strictures of communal authority and tradition. While they may have banded together for the sake of familiarity and mutual self-interest, many had relatively little Jewish religious capital and their Jewish activities were frequently social and political. In these early decades the religious content of American Jewish culture could still be imported from Europe, but the combined effects of two world wars and the Holocaust would later virtually preclude this option. Thus a community that typically emphasized Americanization (as they put it) over the preservation of a religious culture would nevertheless become the American benchmark for Jewish “tradition.” The educational investments made by immigrants for their children frequently emphasized the secular rather than the religious, partly because of the parents’ own religious values and partly because the high value of time in the market imparted a high cost to investments in Jewish human capital. While the rapid upward mobility of the entire community undoubtedly benefited from this pattern, the religious capital of many second- and later-generation American Jewish immigrants was extraordinarily low. Thus the very people who established and swelled the membership of suburban synagogues had relatively few Jewish resources with which to enhance the quality of Jewish experience. In an economic environment that called for quantity–quality tradeoffs in Jewish observance, this meant that for many the quality of Jewish experience was too low to compete with the many available secular alternatives. With the economic stabilization of American Jewry at high levels of income and secular education has come a renewal of investment (by many if not most) in Jewish religious capital. Some of this is simply an income effect: Americans who want to experience their Jewishness can afford to do so. Improved Jewish education in the United States has also been stimulated by complementarities between different types of human capital. That is, resources devoted to Jewish education are generally more productive when students have high levels of secular education, and vice versa. Thus people with good English skills, familiar with other cultures including their literature and languages, and experienced students of history, would be more sophisticated students of Hebrew and Jewish history and would derive greater benefit from a given expenditure on Jewish education.8

Israel and American Jewry in the year 2020: an economic analysis

157

The paradox of American Judaism in the late twentieth century is that it is rapidly losing its members to assimilation and outmarriage even as it is exhibiting strong signs of rejuvenation and cultural vibrancy. This can be understood by observing that Jewish knowledge and cultural background is a form of human capital that has a strong positive effect on the quality of Jewish religious time. For someone with a high value of time, religious capital must also be high if Jewish observance is to compete successfully with its many attractive alternatives. That is, American Jews with very low levels of religious capital experience correspondingly low benefits from Jewish observance, while those with a high stock of Jewish capital have the potential for greater satisfaction. Jews with a high level of secular education (and hence high earnings) and a weak Jewish background may be in an unstable position, with economic incentives leading to a choice (for themselves or their children) between upgrading Jewish skills or lapsing into non-observance. It is in this context that Jewish education is seen as fundamental to the intergenerational continuity, and hence long-run viability, of American Judaism. The widely-discussed phenomenon of attrition through outmarriage may be seen as one consequence of persistently low investments in Jewish religious capital for a large segment of the American Jewish community. Another consequence is the inclination of many American Jews to define their Judaism in ways that are only weakly connected to its ancient roots and traditions; these are also persons for whom Jewish observance is likely to have low value. If so, by the year 2020 the core American Jewish community will be strengthened in many respects but substantially smaller numerically than its current size.9 Much of the religious innovation popular among American Jews is not so much breaking with tradition as adapting it to its American environment, incorporating the common tradition shared by all Jews everywhere into new forms. In order to be compatible with economic incentives (that is, prices and incomes) that are virtually unique in Jewish history, the Jewish religious capital which is optimal for today’s Americans can be expected to differ from that of other times and places. The fact that many elements of American Jewry and its communal organizations have been innovating towards this goal, and are meeting the “attrition” crisis by emphasizing what amounts to new investments in Jewish human capital, suggests that American Jewry will continue to evolve with its strengthened but smaller core. D. Costs and benefits of Jewish identification As American Jews were becoming more established in their professions and secure in their economic life during the decades following World War II, antiSemitism (whether overt or of the “gentlemen’s agreement” variety) was declining as a factor determining the cost of being Jewish. The causes of decline in American anti-Semitism are beyond the scope of this paper: it may have been the result of post-Holocaust soul-searching among non-Jewish Americans, of actions taken by Jewish organizations mobilized specifically for this purpose, of

158

Economics of American Judaism

increased professional contact with assimilated (“Americanized”) Jews, of diminished importance of religion in general as a basis for ethnic identity and hence rivalry, or of the general decline in racial and ethnic prejudice as articulated by the Civil Rights movement and legislation of the 1960s. Establishment of the State of Israel, and the American government’s support of Israel, may also have contributed to diminishing negative associations with Jews. Whatever the reasons, more than a quarter of a century has now passed in which few Jewish youth see anti-Semitism as a major factor in their careers. Although antiSemitism has never completely disappeared, and has shown some potential for mutating into new forms, most American Jews are sufficiently insulated from its effects that their economic environment is essentially hospitable to the forces of Jewish revival. Yet there are still many aspects of the American environment which pose extra costs on Jewish observance. There are fundamental differences between the Jewish and secular calendars, for example, which impose costs simply because the rhythms of Jewish observance conflict with those of a secular career. When the requirements of Jewish observance are not synchronous with a secular schedule, observing a Jewish event has a higher time cost than it would if schedules were flexible and the extra cost is positively related to wage rates. Thus the high earning power of American Jews presents strong incentives to adapt the rhythms of Jewish life to the American workplace. For example, the high cost of leaving work early enough to be home by sundown (especially in winter) leads to a schedule for many American synagogues of “late” services on Friday evening and none on weekdays. Similarly, the number of major, non-working holidays observed by American Jews is severely curtailed (typically limited to Rosh Hashanah, Yom Kippur, and the Seder nights), while others have lapsed into children’s holidays with little observance by working adults (as, for example, Chanukah and Purim). Costs associated with Jewish identification, as distinct from Jewish consumption patterns, may be important for understanding some other aspects of American Jewish behavior. Evasion of expensive Jewish observance has often been accompanied by a desire to keep one’s Jewish self discreetly separate from the world of work. Even in professions not marked by anti-Semitism many Jewish professionals viewed as precarious (often with justification) the quasi-social acceptance on which their career success was contingent. In such an environment an act as simple as wearing a kipa or choosing not to eat dairy foods with meat might lead to stigma, with a negative effect on clients, referrals, or prospects for promotion which could involve a substantial reduction in long-run earnings capability. Today’s American Jews typically see their economic status as contingent less on their religious practices than on professional achievements and abilities. This is accompanied by more openness in observance of selected Jewish holidays and customs, increased public expression of their support for Israel, and generally less need to “hide” their Jewish selves. Yet there is still a widespread anxiety about appearing “too Jewish”, an embarrassment about parochialism which seems to be

Israel and American Jewry in the year 2020: an economic analysis

159

much stronger among Jews than among members of other religious groups. Presumably this is why Americans have effectively abandoned such visible Jewish identifiers as kipa and kashrut, typically going beyond mere nonobservance to the point of rejecting their centrality for religious observance.10 Although visible Judaism clearly leads to a loss of income, whether for social reasons or otherwise, the magnitude of the potential loss is in dispute and may vary with the circumstances of each individual and community. Within American Jewry there is a small but growing minority (mostly Orthodox) that is aggressively assertive of its Jewishness, clearly identifying itself and absorbing the costs in part by choosing professions and neighborhoods that minimize the inherent conflicts posed by their religious choices. Although its poor compatibility with the economic environment makes it an unlikely choice for most Jews (in the sense that it would entail a large sacrifice in income and consumption), this lifestyle has effectively challenged mainstream Jewish attitudes about public display. Others may perceive the ultra-orthodox as quaint or picturesque, but Jews are more likely to react with embarrassment or even anger. Yet the resurgence of publicly visible Jewish observance in the mainstream may have been stimulated by this challenge, in part because it takes forms which appear more discreet in comparison and in part because of a realization that some of the costs may be more imagined than real. There are two ways in which the stock of religious capital may be related to the visible observance of Judaism. The stronger the Jewish background possessed by an individual, the greater the satisfaction obtained from any particular pattern of observance and thus the more likely are the benefits to outweigh its costs. At the same time, high levels of both Jewish and secular human capital may make it easier to absorb or even reduce some of these costs, permitting some flexibility into a secular work schedule to fit Jewish needs and perhaps even converting Jewish identity from a handicap into a source of respect and admiration. Thus, for example, the insistence by a majority of American Jews (including many who are otherwise non-observant) that Rosh Hashanah and Yom Kippur are days to be spent in the synagogue has led to a widespread social acceptance of their right to discretionary religious holidays and even a closing of public schools in districts with many Jews.11 The implications of these trends for the future of the American Jewish community are uncertain and the source of some controversy. Although anti-Semitism may never disappear, and some fear that it is taking virulent new forms, the economic environment of American Jewry is rooted in its educational achievements and does not appear to be vulnerable. The situation with respect to religious capital is bimodal, the likely outcome being that some will invest more and become more intensely Jewish while others will invest less and reduce further their attachment to Judaism. This suggests that those Jews who still identify with the community in the year 2020 may be more visibly observant, possibly to the point of wearing a kipa and observing kashrut even among the non-orthodox. The implications for those who are marginally attached to Judaism are ambiguous: some may find that there are spillover effects that effectively reduce the cost of asserting their Jewishness, while others may face incentives to reduce

160

Economics of American Judaism

their Jewish participation even further. In either case this group is likely to stress those aspects of Jewish tradition that are least distinctive within the American context (Jewish ethics, liberalism, tikkun olam) and to eschew traditions which make them visible or distinct as Jews.

IV. The Israeli economic environment The remarkable establishment of the yishuv (that is, Jewish settlement and institutions) in British Mandate Palestine and subsequently the State of Israel was accomplished by a Jewish community with roots in the same corners of Europe which provided the main body of Jewish immigrants to the United States. For the most part, however, the economic environment that they faced was radically different from that of the United States. While American Jews strove to participate in an existing educational and occupational infrastructure, Israel’s Jews needed first to ensure their physical security and create a modern economy. Israel also undertook the rescue and absorption of a large number of Jews from threatened communities, a difficult task that they compressed into a remarkably short period of time. Assisted in part by inflows of capital and know-how from the relatively high-income American Jewish community, Israel’s Jews nevertheless allocated to these activities a large portion of their own limited resources during the early decades of independence. Yet progress towards each of these goals was remarkably rapid, and by the time of the Six-Day War in 1967 Israel had clearly transformed itself into an economically developed country with sophisticated technology and manpower. An early emphasis on investments in science, education and health (with strong encouragement from American Jews) had by that time generated high-level capabilities in these areas. Israel’s universities are now among the best in the world, and its population is increasingly well educated. Indeed, by 1990 over 35 percent of the labor force had attained some post secondary schooling, 17 percent with the equivalent of a university-level degree. The proportion of Israel’s labor force in high-level occupations has risen correspondingly, already 30 percent by 1990 and expected to rise to 44 percent by the year 2020. Although Jews in Israel may never reach the high occupational concentration that their minority status permits for American Jewry, it is clear that the secular economic environment is becoming similar in both countries with similar implications for work and demographic patterns by the year 2020. Like their American cousins, Jewish immigrants to Israel during the first half of the twentieth century tended to be self-selected for persons with weak roots in the religious community. Their economic environment in Israel also favored investments in secular rather than religious human capital; they too developed secular Jewish lifestyles, their second-generation children had an even lower stock of religious human capital, and economic success and stability was accompanied by a subsequent resurgence of Jewish knowledge and culture. This Jewish revival took different forms in Israel than in the United States, only in part because of the very different social and economic environment. It was also

Israel and American Jewry in the year 2020: an economic analysis

161

influenced heavily by the absorption of Holocaust survivors in Israel’s early years, by massive immigrations of non-European Jews with their own Jewish religious capital (mainly Sephardi and Mizrachi), and by the special Jewish experience of living in the land of Israel in a Jewish state. In many respects it is clear that today’s Israeli Jews have higher levels of Jewish knowledge than their counterparts in the United States, presumably because they face much lower costs of investment. This is especially the case for those areas with strong complementarities between secular and Jewish knowledge: apart from the Hebrew language itself, studies related to Jewish literature, history, geography, music, and culture are part of the secular education of every Israeli Jew without the additional investment required by Jews in the diaspora. It is less true of areas related to religious tradition and synagogue observance where the acquisition of Jewish human capital entails a less passive allocation of resources. Thus even in Israel there is some tendency towards a bimodal distribution of Jewish observance, with low levels of religious knowledge associated with a marginal attachment to religion and greater attachment on the part of those with larger investments. One important difference between the Jewish environment in Israel and the United States is that the costs associated with Jewish identification are much lower in Israel. Although participation in the world economy requires adoption of a secular calendar, the rhythms of work and leisure are scheduled around Shabbat and the Jewish holidays that conventionally begin at sundown. This not only makes it easier (that is, less costly) to lead a Jewish lifestyle, it also creates many opportunities for observing holiday traditions (and hence creating religious human capital) at relatively low cost. The public environment thus lends Jewish content even to secular lifestyles and greatly increases the productivity of investments in religious human capital. Another important difference between Israeli and American Jewry is that Judaism is a state religious monopoly for the Jewish community in Israel whereas it is only one of many competing religions in the marketplace of American pluralism. American Jews who derive low levels of satisfaction from Jewish religious observance, whether because they have low levels of Jewish capital or for some other reason, may easily exit the Jewish community by assimilating into the secular mainstream or by changing their religious affiliation. Since this option is available in Israel only at great cost, Israelis who derive low levels of satisfaction from religious observance are much more likely than their American counterparts to continue identifying Jewishly. Whereas in America low levels of Jewish religious observance may lead to a dramatic reduction in the number of Jews, in Israel it is more likely to result in the development of a strongly attached secular community. There are several additional implications of state religious monopoly that affect the economic environment of Israeli Jewry. Implicit in the notion of a Jewish state, Israel provides Jewish religious groups opportunities for secular power that are unavailable in the diaspora. Aggressively assertive Jewish minorities, both ultra-orthodox and ultra-secular, have responded to the strong incentives to exercise that power by becoming major players in Israeli politics.

162

Economics of American Judaism

At the same time, state religious establishments are generally less responsive to consumers’ demand for religious expression than their counterparts in a pluralistic environment who compete for membership. The incentives for investing in religious human capital are correspondingly lower in Israel than in the United States, as is religious observance in general. American Jews are much more likely than Israelis to affiliate with a synagogue and participate in religious services for essentially the same reasons that membership and attendance within various Christian denominations is higher in the United States than in the countries where they are established as a state religion. These economic considerations have implications for the development of Judaism in Israel between now and the year 2020. Although Jewish human capital can be expected to deepen, Israelis are more likely to emphasize secular Jewish knowledge and be less concerned than their American cousins with matters of religious observance. Factionalism, especially between the ultra-orthodox and the ultra-secular, is likely to continue in Israel at levels unlike anything observable among American Jews in their pluralistic environment. Rooted as it is in the very notion of a Jewish state, a tendency toward religious factionalism may well persist as the most profound difference between the Judaism of Israel and the diaspora. Indeed, managing its religious conflict presents Israel with what may be its greatest challenge as the Jewish State. Its choice of solutions will have a profound influence on the role of Israel within world Jewry and on the balance of leadership between the Jewish communities of Israel and the United States.

V. Israel and American Jewry Israel and American Jewry have a relationship solidly grounded in a set of common goals: each places great importance on high secular achievement and the socio-economic infrastructure required to support it, and each is concerned as a community with the continuity of Jewish culture and tradition. The resource allocation that is optimal for each community will differ according to their relative prices and incomes, leading to differences in local traditions and patterns of Jewish observance. The two communities also differ in the composition of their respective stocks of religious human capital and in the broader social consequences of Jewish religious conduct. These differences constitute the economic foundation of the evolving relationship between Israel and American Jewry. A. Secular gains from trade American Jewish patterns of secular education and occupational attainment are demonstrably stable and are likely to continue. That is, most American Jews will earn professional or comparable degrees and about two-thirds will work in high-level white-collar occupations with correspondingly high earnings. This pattern will apply to both men and women. Jewish marriages will typically involve a two-career couple in their late twenties or thirties; these couples will have small families and will devote substantial resources to investments in their

Israel and American Jewry in the year 2020: an economic analysis

163

children’s human capital. Although investments in Jewish education will be important, secular investments in education and health will probably continue to receive greater emphasis. A growing fraction of Israeli Jews (possibly near 50 percent by the year 2020) exhibit similar labor force and demographic behaviors.12 Israelis in most highlevel occupations invest heavily in English fluency as part of their professional development, and many carry out some portion of their higher education in the United States. Moreover the professional development of high-achieving Israelis typically involves travel abroad for various purposes: to attend conferences, teach or study, promote business relationships. Foreign travel is a more important aspect of secular investment for Israelis than for Americans, in part because the people of a small country are more likely to have interests that extend beyond its borders. Indeed, it is by coming to the United States for such purposes that Israelis most often come into contact with the American Jewish community. Although Jewish demographic patterns may stabilize in Israel at a somewhat lower marriage age and larger family size than in the United States, the basic structure will be about the same. By the year 2020 two-career couples will be even more common in Israel than they are today. These couples will typically have high education and occupational attainment, comfortable levels of consumption, and high investments in their children’s human capital. The lifestyles of these Israeli families are often similar to that of their American cousins (that is, “Americanized”), and they typically have much in common when they meet in professional or social settings. Marriages between Israeli and American Jews become relatively easy, and immigration flows move in both directions. All of these result in cross-country family ties that further bind the two communities. Persons with high income and education of the sort that is common to the two communities also tend to have a relatively high consumption demand for travel. Both American and Israeli Jews like to travel during their vacations, whether for relaxation or tourism, and each lives in a country with many opportunities for both. American tourists are more visible in Israel than are Israeli tourists in the U.S., in part because of its much smaller “native” Israeli population and in part because of the size of the tourist industry in Israel’s economy. Yet Israelis visit the United States as tourists in growing numbers, a trend which will surely be further stimulated as professional and family relationships continue to develop. B. Jewish gains from trade With the convergence of economic conditions in Israel towards those of the United States, American Jewish religious innovations will have increased appeal for Israelis. Few Israelis may actually join American-style synagogues, but it is almost certain that the Israeli Jewish environment will be influenced by the American experience. “Americanization” features especially attractive to highwage Israeli professionals will include those that successfully substitute quality for quantity of time spent in religious observance. Least appealing will be the

164

Economics of American Judaism

American forms of Jewish observance premised on low levels of Jewish experience or a weak sense of Jewish identity. Economic convergence between the two countries can also be expected to increase even further the extent to which American Jews depend on Israel for their Jewish human capital. Israeli influence is already evident in American synagogues and Jewish schools: Hebrew language skills, liturgical and popular music, and the artifacts and customs associated with holiday observance speak eloquently of the widespread grass-roots appeal of Israeli forms of Jewish capital. Even Israel’s secular culture contributes routinely to an American Jewish education: for example, popular songs (in Hebrew), movies, or newspapers with current events. Indeed, the very fact of an active and vibrant Jewish state affects the way in which Americans learn about the concept of a Jewish nation. In much the same way that Israeli youth acquires part of its secular education in the United States, American Jewish youth increasingly goes to Israel for part of its Jewish education. American Jewish institutions benefit from Israeli-trained teachers and shlichim (advisors) in the same way that secular institutions benefit from similar international exchange. This is because there are many forms of Jewish human capital (Hebrew language, Israeli geography and history) for which the investment cost is much lower in Israel than in the United States. Spending time in Israel, whether measured in weeks or months, can be a relatively inexpensive way of increasing the Jewish background of American youth and thus an efficient means of enhancing their future Jewish experience. C. Other gains from trade Just as the broader social context gives Jewish observance very different economic implications for individual Jews in the diaspora and in Israel, so the impact of each community on the other will also be different. Under present conditions it is clear that American Jewish self-esteem is enhanced by Israel, in part by its very existence as a Jewish state and in part by its character and actions. Similarly, Israel’s strength and self-esteem in the arena of world affairs is positively affected by the existence and support of a strong Jewish community abroad. While neither community is truly dependent on the other in any absolute sense, it is clear that each benefits from the other and that the combined effects are very significant for Jewish life in our time. Although difficult to measure, one indication of Israel’s importance to American Jews is in the nature of their financial contributions. Whether measured by the size of donations or the number of donors, American Jews seem most responsive to causes that focus on the rescue of endangered Jewish communities and their resettlement in Israel and to causes associated with Israel’s economic development and security. Indeed, Israel’s rescue and resettlement activities are viewed so much a part of communal self-interest that they are typically raised in combined campaigns with local Jewish Federations serving local needs. Private donations by American Jews also serve as a means of participating in the national experience that Israel represents. The activities through which such

Israel and American Jewry in the year 2020: an economic analysis

165

funds are raised and channeled are suggestive of such a relationship.13 For example, Jews of all ages and religious styles “plant” trees in Israel to honor various persons or occasions, a popular American Jewish tradition which originated during the early decades of this century with the purchase of land in Israel and which is now being extended to the general improvement and conservation of Israel’s natural resources. Similarly, virtually every American Jewish family contains at least one member of Hadassah (a grass-roots, U.S.-based organization devoted to building and augmenting Israel’s health infrastructure and medical facilities); supported by several generations of American women, it has recently extended its membership to include men and is a major force in American Zionism. Other organizations (such as American Friends of the Hebrew University) are linked to a variety of educational, cultural, and scientific institutions in Israel. American Jews also express the bond between themselves and Israel through political activities within the United States. While a number of organizations are engaged in explicit lobbying activities on Israel’s behalf, participation at the grass-roots level may be a better indicator of perceived self-interest and hence the extent to which Israel affects favorably the environment of American Jews. American Jews are strongly supportive of Israel’s legitimacy as a nation (that is, of its right to exist), the central tenet of Zionism that many still view as potentially at risk, and they become more Jewishly active as voters and campaigners when a candidate is exceptionally supportive or hostile towards Israel. American Jews are also prone to see anti-Zionism and anti-Semitism as closely related phenomena, if not actually the same thing, and feel threatened on both counts by anti-Israel rhetoric. Although educated American Jews may be casual in their Jewish politics, they like to read news or feature stories about Israel and in conversations with neighbors and co-workers they are more likely to provide Israel’s perspective on a controversial event. Yet it is extremely important to American Jews that their identification with Jewish nationhood in Israel be fully consistent with their national identity as Americans. American foreign policy is crucial in this regard, since any potential conflict is minimized when support for Israel is in the self-interest of the United States. The threat of a split (as, for example, when the United States is critical of Israel’s settlement policy in the territories) stimulates Jewish activity of many types: lobbying the U.S. government to be more supportive of Israel; lobbying Israel’s government to be more accommodating to American policy; active discussion in many forums, public and private, aimed at reconciling the two points of view. Whether the actual opinions expressed are for or against the position of Israel’s government, the energy devoted to this activity is an indicator of Israel’s perceived importance to American Jewry. This suggests that both political argumentation and fund-raising activities endure as staples of American Jewish life in part because they express solidarity with Israel in ways that avoid conflict with strong American identities and loyalties. Yet their effectiveness as such has been undermined by Israel’s successful economic development and by the relative concentration of world Jewry in Israel and the

166

Economics of American Judaism

United States. While perceived threats to Israel’s security may still mobilize the financial resources of American Jewry, such threats can not be expected to serve indefinitely as the main unifying force between the two communities. The extent to which other avenues can be found for American Jews to participate in the Jewish nationhood that Israel represents will thus have important implications for the strength of the bond between the two communities by the year 2020.

VI. Conclusion By the year 2020 Israel and the United States will dominate world Jewry as the two major centers of modern Judaism. As such, each is bound to affect the other in both secular and Jewish arenas. Both communities will be characterized by very high levels of secular education and a labor force correspondingly skewed towards the high-earning professional, technical, and managerial occupations. This concentration will be greater in the United States, where Jews are a small minority of the labor force, than in Israel, but it will be a dominant feature of Jewish economic life in both countries. As Israel’s occupation patterns converge towards those of American Jewry, economic incentives in Israel by the year 2020 will have made more attractive those American Jewish practices that effectively substitute quality for quantity of time in religious observance. American religious practices associated with low levels of Jewish religious knowledge and attachment will be less prominent than today, in part because they will have little appeal for Israelis and in part because of high assimilation rates in the United States. In contrast, Israeli Jewish practices associated with extreme levels of religious knowledge and observance, both high and low, will continue to be important in Israeli Jewish culture. Convergence in the two secular economies will thus lead to a strengthening of the middle of the religious spectrum in both countries, and an American Jewry in which the two religious extremes (secular and orthodox) are smaller than in the Israeli Jewish community. By the year 2020 American Jews will routinely turn to Israel to increase the effectiveness of their investments in religious capital. Tourism and study in Israel, already an important part of American Jewish education, will enhance Jewish identification and have a positive effect on the quality of Jewish experience. American synagogues, schools and youth groups will continue to benefit from the transfer of Jewish religious capital from Israel to the United States, and the teachers and shlichim that come from Israel (whether privately or through official channels between the two Jewish communities) will further enhance this phenomenon. Israelis will also routinely visit the United States for purposes of secular education, business or professional development, and tourism. These exchanges will lead to increased personal connections between the two communities and a growing number of Jewish families with members in both countries. Both secular and religious consumption patterns will thus be more similar for Israeli and American Jews by the year 2020 than they are today. Yet some aspects

Israel and American Jewry in the year 2020: an economic analysis

167

of Jewish culture will continue to differ between the two communities. Generally, national life of the Jewish people will be stronger in Israel than in the United States, while American Judaism will be more adaptive to changes in the external environment. The Israeli Jewish community will be more vulnerable to religious factionalism than that of the United States, but American Jews will be more vulnerable than Israelis to the threat of assimilation. Whether these differences will ultimately divide or bind together these two largest branches of world Jewry depends in part on developments during the next 25 years. Personal experiences in Israel or with Israelis in the United States may be able to substitute for financial contributions as an effective avenue for Americans to express their participation in Jewish nationhood. Bonds between the two communities will probably be strengthened as Americans turn to Israel for an important part of their Jewish education, but an extremist religious environment in Israel may undermine the value of this investment if Israel is seen as rejecting the validity of an American Jewish experience. In the secular sphere, Israel’s success in both foreign and domestic policy can enhance the self-esteem of diaspora Jewry, contributing to the strength of its public voice and consolidating its support for Israel in the world arena.

Notes 1 Arieh Herskovitz, “Summary: Statements of Alternatives”, July 11, 1995 (distributed electronically to list IL-2020, November 18, 1995). 2 One form that this investment can take is the choice of neighborhood in which to buy the family house, a decision in which children’s “needs” often take priority over those of their parents. Another form is in the choice of family vacations; Jewish families often travel with their children to places that complement their school education. 3 This is a proposition about statistical aggregates and does not imply that a particular person with little education would be inefficient in any of these roles. As a general proposition, it manifests itself socially as a tendency to consider low education as an undesirable trait for a marriage partner. 4 The patterns described here derive specifically from high wages and not just high incomes. For example, a high-income American community whose women do not have careers would face different incentives and display correspondingly different demographic behaviors. 5 Indeed, Judaism’s adaptability with respect to changing economic circumstances is conventionally viewed as an important source of strength and vitality, enhancing the texture of its religious life with customs contributed by many different communities and many generations of Jews. The effect of economic life on Jewish religious observance is also a staple of historical exposition as, for example, in biblical times the customs well-suited to a small nation of nomadic herders are described as giving way to new religious practices when Jews first became a settled agricultural people and then later engaged actively in international commerce. 6 Defining the nature of Jewish experience that constitutes the religious “good” is a subject well beyond the scope of this paper. For analytical purposes, however, the religious good is viewed as fulfilling three types of wants: spiritual, social, and (for want of a better label) afterlife. An afterlife good is an investment which yields returns after the consumer’s own lifespan; although most American Jews do not believe in an individual afterlife, continuity of the Jewish people from generation to generation is an important religious concept.

168

Economics of American Judaism

7 This attraction is implicit in the tendency for “Americanization” to spread, even to communities that are opposed to it in principle. 8 Complementarities can work in both directions: there is some evidence that people with a strong Jewish education may do better in their secular studies. Although beyond the scope of this study, it is a prediction of economic theory that links continued high achievement in secular fields to relatively high levels of Jewish learning. 9 The persistence of a below-replacement Jewish fertility rate lower than that of the general population also implies a decline in both the number of Jews and their share of the American population. It is unlikely that this trend would be reversed or even appreciably affected by a large scale immigration to the U.S. of Jews, whether from elsewhere in the diaspora or from Israel, during the next quarter century. 10 Three of the identifiers that traditionally distinguish Jews from other people are the brit mila, observance of kashrut, and wearing a kipa. Only the first of these is common among American Jews, but it has virtually no public consequences and infant male circumcision is the norm even among non-Jews. In contrast, both kashrut and kipa involve a public declaration of Jewishness that makes many American Jews decidedly uncomfortable. 11 Public schools tend to be closed in districts with many Jewish teachers who would otherwise take the day off. They are much less likely to be closed in schools with many Jewish students or in higher education where faculty tend to be less observant; in these settings students and teachers who observe the holidays must absorb the full cost. 12 The JAFI Statement of Alternatives estimates that by the year 2020 some 44 percent of the Israeli work force will be in high-level occupations under reasonable, “businessas-usual” assumptions. The corresponding demographic group is a somewhat greater fraction of the population since it includes family members working in lower-paid occupations. 13 These avenues of participation are somewhat lower among the orthodox minority, where financial support is more likely to be directed at religious activities in Israel.

13 Immigrant impacts on Israel’s labor force* Implications for economic development

Israel’s immigration policy is grounded in Zionist ideology and is hence determined on a different basis than that of most other countries. Yet costs and benefits are important, and the impacts of immigration on Israel’s economy are substantial. This paper analyzes the long-run economic impacts of Israel’s immigration policy. By focusing on the implications of short-run changes in income and wages for incentives to invest, it is shown that human and non-human capital accumulation can occur in previously unexplored ways.1 The analysis suggests that higher productivity, and hence earnings, may ultimately result despite some adverse effects in the short run.

Conceptual clarifications Immigration policy and its economic implications are frequently discussed in general terms. The result is confusion, and conclusions that are either irrelevant or built into the assumptions of the analysis. A few conceptual clarifications are thus in order. An analysis of economic impacts presupposes the existence of a well-defined domestic entity comprised of “native” persons whose welfare is affected by the level of immigration. This approach is straightforward when the immigrants are guest workers held aloof from the body politic. It can be misleading, however, in countries (like Israel and the United States) where immigrants can become citizens, and hence equivalent to “natives” for many purposes, within the time frame of the analysis. In this paper, an Israeli “native” (non-immigrant) is defined loosely to include any former immigrant who has weathered a transitional period and views himself as integrated.2 When discussing human capital investments, it is important to distinguish between those investments that merely improve skills and those that result in occupational changes. Investment in a new occupation is usually more costly than an investment in skill improvement, and a change in wages and prices must be expected to be correspondingly longer-lived in order to stimulate a change in the occupational structure of the labor force. Long-run changes of this nature are

* Reprinted with permission from Papers in Jewish Demography 1989, pp. 253–257.

170

Economics of American Judaism

typically implemented by new cohorts entering the labor force rather than older workers, and the long-run impacts discussed here should be thought of as affecting the next “generation.” In this paper, the short run refers to any length of time too short for new investments to be realized and the long run refers to a period sufficiently long for all investments to be realized. It is also helpful to define the medium run as a length of time too short for investments in occupational change to be realized but long enough for investments that affect within-occupation skill levels to do so.3

Objectives of immigration policy The specification of national objectives for Israel’s immigration policy must be grounded in the basic principles of Zionism: to build a Jewish homeland that will be secure and open to immigration for all Jews. Economic security is positively related to GNP, and the long-run impact of immigration on GNP is more relevant than the short-run impact. Moreover, influence in the international arena is in part related to a country’s size, and for a small country like Israel this size may be defined in terms of GNP rather than population or even GNP per capita. From this perspective, implications of immigration for aggregate GNP would also be more relevant than the implications for various sectors or interest groups within the economy. In addition, Jewish immigration to Israel may generate benefits to the body politic even if income were to decline as a result. The Zionist ideology incorporated in the Law of Return is an expression of a positive value associated with Jewish immigration, an “external benefit” shared by every Israeli even if it is not reflected by a corresponding increase in income.4 Since the “ingathering of exiles” generates a social benefit in Israel, its value can be imputed and a national objective function can be defined as the sum of GNP and this value.5

Optimal immigration policy The nature of medium-run and long-run adjustment is to counteract short-run adverse effects and to consolidate gains. The long-run cost of immigration will therefore be less than the short-run loss of income. It follows that the optimal Jewish immigration to Israel involves greater numbers, with a correspondingly greater short-run sacrifice in income, than would be the case if national policy were determined in the context of a shorter time frame. Given domestic economic conditions, there is some level of immigration which maximizes GNP in the long run. This level also results in some social benefit, as discussed above. If actual immigration exceeds the level that maximizes GNP, there is a tradeoff between the two goals: the lower income that would result can be offset by the social value of accepting additional immigrants. The amount of immigration which maximizes the combined objective function is thus always larger than that which maximizes GNP.

Immigrant impacts on Israel’s labor force

171

Positive social benefits generated by Jewish immigration make immigrants desireable even if their productivity in Israel is below their world market wage rate. In many cases, skilled workers have the option of migrating to several countries. In the absence of Zionist ideology on their part, and if there were no social benefits involved, Israel would attract (and welcome) only those immigrants whose productivity was at least as high in Israel as elsewhere. A positive marginal social benefit, however, implies that Israel may also welcome (and subsidize) Jews whose productivity in Israel is lower than their opportunity cost. A somewhat different situation arises for the case of unskilled workers without alternative destinations for migration. There is an “efficiency” wage in the international labor market, corresponding to a minimum skill level below which no firm in any country will find it efficient to hire a worker.6 If countries welcome only those immigrants whose productivity is at least as high as their wage, a (potential) refugee below this minimum skill level would have nowhere to go. A positive social benefit for Jewish immigration would make such persons welcome in Israel, however, regardless of skill level. This means that the average skill level of the new immigrants may be lower than otherwise. It also results in a situation where it is profitable for Israel to subsidize training of new immigrants to make them “employable.”

Impacts on incomes of natives The short-run impacts of immigration on domestic wages and prices are wellknown. Immigrants will generally be concentrated in certain occupations; natives in those occupations will experience downward pressure on wages, while those in other occupations may experience wage increases. As a first response to these wage changes, native workers adjust their labor supply on the intensive margin (i.e., quality). Those in immigrant-complement occupations can consolidate and improve on their gains by upgrading skill levels. Those in immigrant-substitute occupations experience economic losses which they can counter in part by reducing labor quality (e.g., working less hard, avoiding responsibility, being less willing to accept unpleasant working conditions). These changes in labor quality have further implications for the structure of wages. Higher quality labor among persons in immigrant-complement occupations will generally raise the productivity of other factors (including immigrantsubstitutes), although lower quality labor among immigrant-substitutes will have the opposite effect. The net effect when all of these interactions have reached a new medium-run equilibrium depends on the basic parameters of the economy.7 Under some fairly plausible assumptions, however, it is possible for all natives to experience higher wages. To illustrate, suppose an increased immigration of carpenters creates a “shortage” of Hebrew teachers and physicians. Suppose further that wages are allowed to find their market levels, and that the Hebrew teachers and physicians respond to higher wages by working harder and upgrading the quality of their skill. This improved quality is available to the economy as a whole, and the higher quality

172

Economics of American Judaism

of Hebrew teachers and physicians may have a significant positive impact on the productivity of other workers, including carpenters. If this effect is large enough, native carpenters may even end up earning more than before the increased immigration despite the initial decline in their wages.8

Long-run welfare implications By altering occupational wage differentials, immigration affects the rates of return to investments in different types of human capital. New entrants to the labor force will favor occupations with the greatest wage increases and shun occupations with small increases or losses. Workers experiencing a wage decline may decide to train for a “better” occupation. There is no a priori guarantee that all natives would benefit from immigration in the medium run, and even so some would benefit more than others. In contrast, the possibility of occupational change leads to equality in the long-run impacts of immigration on native workers.9 Thus if GNP goes up or down, the increase/decrease is shared equally among all natives. These propositions about medium- and long-run effects on wages compare the situation if immigration levels change to the alternative situation of no change in immigration levels. In this context, a native is said to benefit if his or her wage rate is ultimately higher than it would otherwise have been. If an increase in immigration results in current losses and future gains, however, the policy is perceived as desirable only if the income stream which it implies has a positive net present value. This value depends on the time path of wages, the speed with which the medium- and long-run adjustments occur, and the discount rate.10

Conclusion Encouraging Jewish immigration from countries of the Diaspora to Israel is arguably the most fundamental feature of modern Zionism and a distinguishing characteristic of the State of Israel. In support of this principle, Israel’s citizens have made substantial financial sacrifices, and world Jewry has made major contributions to help finance the migration and absorption costs for new immigrants. Insofar as immigration has altered the pattern of incentives to invest in human capital, it has led to increases in the quality and productivity of Israel’s own labor force. Implementing the Law of Return thus seems to be one instance where Israel has been able “to do well by doing good.”

Notes 1 For a complete development see Chiswick (1989). The present paper is an application to Israel of the analysis developed in that article. 2 Studies of the U.S. clearly indicate that there is an initial period of orientation and adjustment lasting about five years, followed by a period of rapid integration. A similar pattern has been observed for various other countries as well. Based on this evidence,

Immigrant impacts on Israel’s labor force

3

4

5 6 7

8

9 10

173

it seems reasonable to view as “native” any immigrant who has lived in Israel more than ten or fifteen years. There is a tendency to think of forty years as a reasonable length of time for intergenerational change, but in fact the economy responds much more quickly. If a wage change affects the rate of return to investments in human capital, the length of time required for new cohorts entering the labor force to reflect this change is merely the four to eight years required for the relevant training. Experience in the U.S., Israel and the newly-industrialized countries of Asia provides ample evidence that major changes in labor force structure can occur in only one or two decades. The model on which this analysis is based assumes that the social benefit increases with the number of immigrants, regardless of skill level or country of origin. For Israel, this benefit should be presumed higher for Jewish than for non-Jewish immigrants. Israel’s willingness to accept a limited number of Vietnamese refugees, for example, is consistent with a positive benefit that is smaller than would have been the case had they been Jewish. For simplicity, this paper will assume that all immigrants are Jewish. The social value is also shared by non-Israeli Jews, although perhaps to a different degree. This is an important motive for the large number of persons abroad who make voluntary contributions to the settlement of Jews in Israel. Efficiency-wage models apply to a market in which there is an “unlimited” supply of (potential) workers because the market wage is higher than their opportunity cost. This condition seems appropriate for a refugee population. The parameters that determine this outcome are the between-factor elasticities of complementarity/substitution in production, the factor shares, and the elasticities of supply for labor quality. See Chiswick (1989) for a formal derivation of the conditions which result in higher wages for all natives. This potential improvement is the result of a net increase in human capital accumulation and does not depend on the specific occupation of the immigrants. If the immigration were composed primarily of physicians, for example, the initial wage effects would lead to gains for Hebrew teachers and carpenters and losses to native physicians. Human capital investments by Hebrew teachers and carpenters might then have beneficial productivity effects on doctors. This assumes that markets are competitive and that all investment costs are absorbed (directly or indirectly) by the beneficiary. Wage equalization occurs net of these costs. For a proof of this proposition, see C. Chiswick (1989). In general, a long-run policy time horizon implies a lower rate of social discount. Conflict can arise, however, if the discount rate of individuals is substantially higher than that of the policy makers.

Reference Chiswick, C.U. (1989). “The impact of Immigration on the Human Capital of Natives.” Journal of Labor Economics, v. 7, pp. 464–486.

Index

absorption of immigrants 40–9; see also assimilation adaptation to new or changed environments 7–8, 34, 126, 131, 155, 157, 167 adult education 114 age-groups, differences between 22–3, 46; see also intergenerational transmission of Jewishness ageing population 114 aliya 144–6 allocative skills 40–2 Americanization 28–33, 42–3, 65–7, 104, 113, 156–8, 163 Anti-Defamation League 101 anti-Semitism 27, 33, 48, 79, 101, 130, 143, 145, 157–9, 165 Ashkenazi Judaism 130, 155 assimilation 7–10, 32, 39, 43, 47, 49, 64, 75, 80, 103–4, 113, 118–19, 123, 127, 129, 132–6, 143, 153, 157–8, 166–7; dangers of 118 “baby boom” generation 71–2 bandwagon effects 109, 123, 131 bar mitzvah ceremonies 68 birth rates 72 Catholic Church and school system 99–100 charitable organizations 34; see also community institutions; voluntarism child-rearing 19–23, 29, 68, 152–6; quantity and quality of 72–3 circumcision 132 “clubs”, economic theory of 8, 109 community institutions 33, 68, 109, 113, 115 conduct and consequences of Jewish religious behaviour 154

consumerism 44, 65 consumption patterns 18, 62–8, 72–4, 122, 131, 166; relative cost of 154–5 cultural conflict 99 degree qualifications 17, 30, 55–6, 150, 162 demographic analysis 7, 73–5, 151–3, 160, 163 dietary laws see kashrut division of labour: between American and Israeli Jewish communities 148; by gender and age 20–3, 46; within families 63 divorce 71, 80–1, 84–5 earnings and earning power 17–21, 28, 40–1, 61–5, 142–3, 158 economics as a discipline 3–4 ecumenism 69, 81–5 education 7–10, 16–21, 29–32, 42–3, 48–9, 55–8, 66–7, 74, 91–104, 126, 134–5, 142, 150–2, 155–7, 162–3 education vouchers 114 egalitarianism 24, 48, 74 “empty-nesters” 73, 153 entrepreneurship 55–6 exclusivism, religious 69, 81–5 experience-earnings profiles 40–2 externalities: of the Jewish environment 133–4; of religious education 95–9, 103 factionalism, religious 162, 167 family businesses 15, 29, 57 family life 20, 46, 48, 62–8, 110; cost of 63–5, 68; quality of 65–8 family-related skills 66, 75 family size 19, 30, 32, 72–5, 162–3 family traditions 44 fertility rates 30, 55, 72–3

176

Index

“free-rider” problem 123, 131 fundamentalism, religious 99–100 fundraising campaigns 34, 114, 144, 164–5 gains from trade 162–6 garment industry 29, 54, 56, 58 gender differences and gender equality 20–4; see also under women Germany 53, 55–6, 58 gross national product (GNP) 170, 172 Hadassah 144, 165 Hebrew Free Loan Societies 33 Hebrew Immigrant Aid Society 33 Hebrew language 30–2, 47–9, 67, 102, 109, 126, 154, 164 Hebrew schools 67, 109, 155 Hillel Houses 115 holidays, timing of 158–61 Holocaust, the 156, 160–1 home schooling 100 human capital 19, 30–3, 62, 151; family-related 65–73; investment in 28–9, 40–9, 64, 66, 72–3, 92–6, 101–4, 119–26, 130–1, 169, 172; sources of 91; specifically Jewish forms of 67–70, 74, 109–14, 119, 122–7, 131–6, 156–7, 161–4; see also investment in human capital immigrant-complement and immigrantsubstitute occupations 171 immigrants and immigration: into Israel 8, 147–8, 160, 169–72; into the US 6, 9–10, 27–31, 34, 39, 54, 64, 155–6; see also self-selection by immigrants intergenerational transmission of Jewishness 16–19, 23, 73, 92, 103–4, 107, 110, 113, 118–19, 135, 157, 170 intermarriage see outmarriage Israel, State of: economic environment of 160–2; future development of Judaism in 162; immigration into 8, 147–8, 160, 169–72; relations with American Jewry 33, 141–7, 149, 155, 162–6; relations with the Jewish Diaspora 8, 162; relations with the US government 158, 165; religious human capital accumulated by 48–9 Jewish Agency for Israel 8, 149 Jewish culture and scholarship 23, 75, 109–10, 125, 133, 135, 154, 160, 162, 166–7

Jewish environment, quality of 130–5 Jewish identification 146, 166; costs and benefits of 157–61 Jewish identifiers 22, 132–6 Jewish identity 31, 85, 107, 114; economic model of 119–25, 135 Jewish National Fund 144 Jewish observance 6, 10, 19–23, 31–4, 42–3, 49, 62, 66, 75, 83, 115, 125, 135, 154–64; cost of 12, 17–18, 107–13, 131–4, 141–3, 146, 154–5, 158–9 Jewish Studies 4–5, 9 Jewry, American: distinctiveness of 18, 24; influence on Judaism elsewhere 34, 39, 155, 167; interactions with non-Jews 112–13; relations with Israel 33, 141–7, 149, 155, 162–6 Judaism: assertive forns of 159, 161; Conservative movement in 48, 70, 102, 142, 155; distinctiveness of 84, 153, see also under Jewry; emphasis on study and learning 42, 48, 110; human capital-intensive nature of 101, 126, 129, 135; Orthodox 48, 69–70, 83, 102; passive form of 22, 32; practice of see Jewish observance; Reform movements in see synagogue movements; survival prospects for 75, 119, 129, 134, 153, 157; as a system of ethics 47, 67, 69, 83, 101–2 kashrut 33, 133–5, 159 labour force participation rates 15–16, 61 life-cycle patterns 22–3, 152–3 life expectancy 74 lifestyle choices 111–12, 141–3, 146, 151–2, 159–63 literacy 126 liturgy 20 lobbying 165 marital status by age and sex 71 marriage: age of 71–4, 163; choice of partner 68–9, 79, 81, 85, 111–12, 134, 152; see also outmarriage Medieval society 129–30 mobility: geographical 56; socio-economic 17, 22, 27–33, 55, 61, 67, 143, 151, 155 Mormonism 82 National Jewish Population Survey (1990) (NJPS) 7, 12, 78–9

Index 177 Nazism 33 niches in the US economy 54, 56, 58 occupational distribution 13–14, 44, 54–7, 61, 64, 73, 142, 151 one-child families 74, 115 outmarriage 23, 32, 47, 49, 56–7, 69–70, 73, 78–85, 113–14, 134, 155, 157 Palestine, British Mandate in 33, 160 parenting see child-rearing pluralism, religious 79, 85, 101, 104, 153, 161–2 political activity 165 population, Jewish 39, 53–6, 100; see also demographic analysis production function theory 92–8, 102, 122 production possibility frontier (PPF) 94–6 professionalization 13–16, 21, 55–7, 61, 124, 142–3, 151, 162 public goods 122–3, 131, 135 quality of life 108–9; see also family life, quality of rabbinic leadership 31, 43, 130 religion: economics of 108, 131; as a home-produced good 154–5; state monopoly of 161 religious capital 154–9 Religious Identity and Influence Society 99 religious study and religious skills 31–2, 42–7, 67, 110, 161, 166 remittances 33 residence patterns 32, 56, 113 ritual, religious 110 role models 21, 151 Russia 27, 29, 31, 39, 43, 48, 54, 56, 58, 101, 155 Sabbath observance 133, 134–5, 161 secularism and secularization 10, 23, 79, 103–4 self-employment 57–8; see also family businesses

self-esteem, Jewish 164, 167 self-help organizations 33 self-selection by immigrants 42, 44, 101, 156, 160 Sephardi Judaism 130 single-parent families 115 single people 23, 71–3, 114–15, 152 Six-Day War 141–2, 145–8, 160 skepticism, religious 98–101 skills, acquisition of 40–2, 66, 75, 171; see also human capital, investment in; religious study and religious skills social fragmentation 103 synagogue attendance 10, 19–21, 31–2, 43, 68, 156 synagogue-building 155 synagogue movements, non-Orthodox 10, 19, 23–4, 31, 34–5, 47–8, 69–70, 83, 101–2, 108, 142, 155 synagogue practices 31–2, 43, 68, 158, 166 The Talmud 126, 130–1 time: quantity and quality of 65, 68, 155–7, 163, 166; restrictions on use of 133; value of 10, 17–23, 33–4, 42–9, 63, 65, 68, 74–5, 108, 110, 134, 151–2, 155–6 time-intensive Jewish identifiers 132–5 Torah 126, 130 travel and tourisn 163, 166 umbrella organizations, Jewish 34 United Jewish Appeal 34 utility maximization 93 voluntarism 152–3 women: education of 30, 55–6, 142, 150–1; employment of 29, 54, 57, 61; role in religious and community organizations 20–1, 33, 44, 152–3 World Congress of Jewish Studies 9 Zionism 33, 82–3, 144, 146, 149, 165, 169–72