Secular education and religious values in the formation of human capital

Abstract Purpose – The purpose of this paper is to analyze the causal link between religion and the formation of human capital. It takes into consideration that, though religion may transmit a system of values that positively affect children’s education, it can also be characterized by a traditionalist dimension. The latter may hamper children’s self-determination and their educational achievements. Nevertheless, religious values may adapt to the cultural changes due to economic development and modernization and become less conservative. Design/methodology/approach – The above aspects are investigated through an overlapping generations model with human capital where parents’ human capital and the religion in which individuals have been raised, characterize family background. Findings – The model’s predictions point to the crucial role that development may play in promoting education. For instance, if a moderate responsiveness of religious institutions to economic and cultural changes is associated with low development, conservative attitudes prevail in society. This undermines individual confidence in improving one’s socio-economic status through education and negatively affects children’s education. Whereas, a development level sufficiently high counterbalances the effects of a low ability of religious institutions to adjust to changes and fosters education. Originality/value – Though the empirical literature widely acknowledges that religion affects economic growth, the hypothesis that the link between religion and economic performance may also pass through education has been overlooked. In this respect, the paper investigates on this relationship by taking religion as a force reactive to economic processes.