Truck and Barter

Via AL Daily and Cafe Hayek, we find Niall Ferguson insisting that 1) the unemployment rate in the US has averaged 4.6% over the past 10 years, and that 2) higher religiosity causes Americans to work more than some Europeans.

The first claim:

There are, for example, many more Europeans out of work than Americans; over the last decade, U.S. unemployment has averaged 4.6%, compared with 9.2% for the European Union

Let's see. I don't know what series Mr. Ferguson was using, but the standard series--the CPS Unemployment rate for those 16 and older (LNS14000000)-- yields a mean monthly unemployment rate of 5.1% from August 1994 to July of 2004. Only 43 of the last 120 months had an unemployment rate equal to or below 4.6%. You get a similar number if you use the annual data. His claim still holds, but why not use familiar and common data?

The second claim:

In 1999, according to the Organization for Economic Cooperation and Development, the average American in employment worked just under 2,000 hours a year (1,976). The average German worked just 1,535 — fully 22% less. According to a recent U.S. study, the average Frenchman works a staggering 32% less.

Twenty-five years ago, this gap between U.S. and European working hours didn't exist. Between 1979 and 1999, the average American working year lengthened by 50 hours, or nearly 4%. But the average German working year shrank 12%. The same was true elsewhere in Europe....

[M]ore than twice as many North Americans as Europeans attend religious services once a week or more.

I do not say this is the sole explanation for the fact that London today is lethargic while New York toils away as usual.

First we inquire whether there actually has been a relative decrease in church attendance in Europe since 1979. Apparently so:

Church attendance has dwindled by more than 30% in Britain since 1980. Over the same period, the percentage of the population claiming membership in a religious denomination has dropped more than 20% in Belgium, 18% in the Netherlands and 16% in France. Christianity remains Europe's main religion, with about 550 million adherents. But the number of Europeans who identify as Catholic — by far the biggest denomination on the Continent — has fallen by more than a third since 1978.

Second, the time series data on church attendance in the US uses a different question starting in 1990, yielding inconsistent and hence inconclusive evidence... even though it strongly suggests that religiousity has been essentialy flat in the US. (This is one of the best examples of question bias I have ever seen--increasing the "never attend church" respondents by about some 20 points after 1990).

Third, Mr. Ferguson's claim that, "Between 1979 and 1999, the average American working year lengthened by 50 hours, or nearly 4%." really means that the time series is essentially flat also--meaning that the working hours of Americans are relatively unchanged since 1979 (see chart 6).

So we have European church attendance and working hours decreasing, while those in the US remain about the same (even though some studies show an increase in American working hours).

Beautiful national correlations, but no causation. In fact, I think that causation must work at the individual level, and should be seen at a more disaggregate level. Does this "religious effect" work within nations--at the state, local, and other levels? Shouldn't the religious be working harder everywhere, not just in countries where they represent the majority?

If so, the mean "annual hours" reported are not representative of the whole distribution (which should be bipolar in each geographical region), the "hard work" pole being far larger in the US than in Europe. If real, this should show up in the data someplace, and would make a fantastic chart. And if it were real, Mr. Ferguson would be making comparisons of states with high religiousity and hard work with those of low religiousity and little hard work.

Since neither of these has, to my knowledge, occured, I doubt the economic significance of church attendance as a causative factor in hours worked.