The Chosen People who Invested on Themselves
ECONOMICS |

The Chosen People who Invested on Themselves

MARISTELLA BOTTICINI EXPLAINS WHY THE CHOICE, MADE BY THE JEWS TWENTY CENTURIES AGO, OF INVESTING IN HUMAN CAPITAL, CONTINUES TO BEAR FRUIT TODAY

The occupational structure and the economy of Jews are usually seen as the outcomes of exogenous factors such as persecutions and restrictions on activities. But what if the lever for economic growth is an endogenous factor such as the human capital, instead? This is the thesis of The Chosen Few: How Education Shaped Jewish History, 70-1492, a book by Maristella Botticini, Professor of Economics at the Bocconi University and Director of the IGIER institute, and Zvi Eckstein, Professor at the IDC and the Tel Aviv University.

Their research has lasted twelve years and won the 2012 National Jewish Book Award in the U.S. “We started out with the question: why are the Jews a small, but incredibly skilled population?” says Botticini.

Botticini and Eckstein travel back in time to 70 CE, when the Second Temple in Jerusalem is destroyed. The traumatic event causes a radical change in Jewish religion: it is no longer focused on ritual sacrifices, but on the requirement to read and study the Torah. “In a largely rural world, an entire community, children included, is obliged to educate itself”, Botticini says. “The investment in children’s literacy is a costly requirement that ensures no short-term economic return, but ends up creating a small literate population in an otherwise largely illiterate world”. After eight centuries, the establishment of the Muslim empire causes the growth of commercial economy and urbanization. “Thanks to their ability to read and write, Jews have a comparative advantage and become specialized in skilled craft, trade and finance”.

Botticini is currently working with Eckstein on the second part of the book that will cover the demographic and economic history of the Jews after 1500. “We are witnessing a demographic explosion. After 1500, The Chosen Few turn into The Chosen Many. Thanks to the higher level of education of men and women, Jews have a low infant mortality rate. And when they migrate to the US, they are poor but highly educated and thus they have a faster access to the highest-paying jobs”. And twenty centuries later, the forward-looking investment in education and human capital is still the lever for Jewish intellectual and economic success.

Read the other stories on the topic of Human Capital:

We Are Who We Hire    
Gig Economy: What Rights for Workers?  
Not only CEOs, the Importance of the Manager
Investing Time in Children Pays
Uncertain Victor, Better Candidates
The Importance of Incentives
The Consequences of Uncertainty on Families
Autonomy in Decision Making: the Right Balance is Required
The Geography of Human Capital
Not all Directors have the Same Value
 

by Claudio Todesco
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