Jewish persecution's economic effects linger, study finds

Areas with history of discrimination have less stock market participation

The effects of discrimination are long-lasting, both for the aggressor and the persecuted — passed through the years, consciously or not.

Previous research has shown a striking historical persistence of anti-Semitic views, and, according to new research from the University of Chicago Booth School of Business, areas in which Jewish people historically were persecuted have lower stock market participation today.

"Those living in counties with higher historical violence against Jews trust the stock market significantly less than others, " Michael Weber of Chicago Booth, Francesco D'Acunto of the University of California at Berkeley Haas School of Business, and Marcel Prokopczuk of Zeppelin University write in their working paper, "Distrust in Finance Lingers: Jewish Persecution and Households' Investments."

"For centuries, Jews have been associated with financial services," they write, noting that this belief goes back at least to 1049. "A one-standard-deviation increase in Jewish persecution leads to a 7.5 percent to 12 percent drop in the average stock market participation."

So economically, discrimination harms not just the discriminated, but those discriminating, as well.

"The equity premium has been historically high," Weber says, "thus, the legacy of Jewish persecution — distrust in finance — has hindered generations of Germans from accumulating financial wealth."

Weber, D'Acunto and Prokopczuk looked at historical data across German counties, with data from France used as a control, to measure past occurrences of anti-Jewish sentiment and actions, and correlate the lingering effects on economic participation. They also utilized Nazi voting records and data on Jewish persecution during the Nazi period to corroborate their findings.

Distrust in finance is a cultural trait passed down through generations, independent of education levels and current beliefs about Jewish people. And areas with higher levels of historical violence against Jewish people trust the stock market significantly less, regardless of current education levels.

"The results are not driven by current anti-Semitism, by a conscious association of Jews with finance, or by general backwardness of households," they write.


Contact: Michael Weber is available for comment at

From: Ethan Grove, Chicago Booth Office of Media Relations, 773.834.5161 (office), 773.420.8670 (cell),