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The modern economy and the decline of religion

Christ moneyAs seen in Western Europe, something about the modern economy (and its success) correlates with a decline in religiosity. It appears that as the economy grows under capitalism, religion shrinks. Economists have debated why exactly this happens for over a century. In an effort to find an answer, Jochen Hirschle (University of Innsbruck, Austria) compiled data from 1970, concluding that prosperous economies provide non-religious alternatives to religious needs – hence the decline in religion.

If correct, Hirschle would settle an old debate between two schools of economics. For the one school, successful modern-style economies lead to a decline in religion because of secularization: in order to be viable financially, all parts of a society must (to varying degrees), conform to the rationality of capitalism. That is, they must compete in an open market for money with which they stay afloat. In the case of churches, citizens consume religion just like any other product (such as toothpaste), and the various churches compete against each other for customers. No customers means no donations and thus that church dies. Religion eventually becomes less plausible because it exists merely as another type of consumerism in a secular world.

For the other school, one of religion’s main functions is to provide for the needs of people, whether physical or psychological. In a modern economy, rather than having to rely on the church for physical needs or religion for psychological needs, people instead can find suitable alternatives on the open market. As a result, non-religious alternatives fulfill religious needs.

To test these schools of thought, Hirschle analyzed a variety of data, including the Eurobarometer (EB), International Social Survey Programme (ISSP), European Value Survey (EVS), World Value Survey (WVS), European Social Survey (ESS), and the Allbus (General Survey, Germany) from 1970 to 2009. From there, Hirschle categorizes the relevant data into three groups: economic performance (for example GDP), traditional religious practice (for instance, church attendance), and religious beliefs.

As expected, in almost every country studied, church attendance declined over time. However, religious belief displayed a more complicated relationship with economic growth. In some countries, such as France and Britain, religious beliefs declined alongside church attendance. In others, though, religious belief stayed the same (in 6 of the 13 countries studied in fact) or even increased, as it did in Italy.

In order to explain the slide in church attendance but the relative stability of religious belief, Hirschle created four models. The first two models clearly demonstrate the relation between GDP and church attendance: as GDP increases, church attendance decreases, and eliminates “time” as a possible explanation for the latter. Model three hones in only on countries where information about church attendance and religious belief is available, finding that, as before, GDP and church attendance are negatively correlated. Finally, the fourth model follows model three only also factors in religious belief. All told, it demonstrates that GDP does have a direct effect on church attendance (it is not mediated by religious belief) and conversely the effect GDP has on religious belief is only indirect because it is mediated by church attendance.

Hirschle concludes: “In sum, the findings clearly support the hypothesis…that economic development creates and drives an alternative market for the supply of goods that fulfill religious functions. Individuals do not necessarily have to become less religious as they become richer.” In other words, since modern economic growth negatively correlates with church attendance but not religious belief, the best explanation is that people’s beliefs have not changed but the way they practice their beliefs has. As such, religious believers, thanks to the modern economy, have found ways to fulfill their religious needs outside of traditional religious institutions. Those who care about declining church attendance should pay attention to Hirschle’s two cents.

For more, see “‘Secularization of Consciousness’ or Alternative Opportunities? The Impact of Economic Growth on Religious Belief and Practice in 13 European Countries in the Journal for the Scientific Study of Religion.


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