As Millions Of People Fast For Ramadan, Does The Economy Suffer?

New research examines the effects of Ramadan, the Muslim holy month during which millions of people around the world go without food all day. Does religious practice affect economic growth?

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And we are approaching the end of Ramadan, the holy month where Muslims fast from dawn to sunset. The fact that hundreds of millions of people around the world go without food all day has drawn the attention of another group of people - social scientists. To learn what they discovered, our David Greene sat down with NPR's social science correspondent, Shankar Vedantam.

DAVID GREENE, BYLINE: OK, Shankar, so explain to us exactly what social scientists were studying here.

SHANKAR VEDANTAM, BYLINE: Well, David, these are researchers who are trying to tease apart the effects of religious faith and behavior on economic activity. I spoke with Filipe Campante. He studies public policy at Harvard's Kennedy School. Here he is.

FILIPE CAMPANTE: Being in church or going to the Temple means that at that time, you're not going to be working or you're not going to be engaging in materially productive activities.

VEDANTAM: Campante told me that there's a chicken-and-egg problem. It's hard to know whether religion is actually changing economic activity. So, for example, if we see more religion in poorer parts of the world, which we often do, is that because religion has shaped economic life, or is it that because being poor is a driver for pursuing religious beliefs?

GREENE: Interesting - actually causing people to look for religion...

VEDANTAM: Exactly

GREENE: ...In order to improve the lives. Well, let's talk about how Ramadan fits into all this. Is there some connection here that we're talking about?

VEDANTAM: Yes, so Campante told me that Ramadan offered him, his co-author - this is David Yanagizawa-Drott - a unique way to solve this chicken-and-egg riddle. And that's because Ramadan happens to be a religious observance that falls at different times of the year. It's driven by the lunar calendar. So some years, you have Ramadan in the summer. Some years, you have it in the winter. When Ramadan falls it the summer, as it does this year in the United States, the days are longer.

Now, since Muslims who observe Ramadan are supposed to fast from dawn until sunset, what this means is that the length of fasting will depend on the season. Campante and Yanagizawa-Drott analyzed changes in the lengths of fasting in a 167 countries over more than 60 years. And they measured how economic productivity rose and fell in those countries over time. And they found that longer periods of fasting were associated with a drop in productivity. So having your fasting from go from 12 hours a day to 13 hours a day, for example, means a GDP drop of about seven-tenths of 1 percent, which is quite sizable. And interestingly they find that this effect is only in Muslim-majority countries, so they're not picking up on some seasonal variation in economic productivity.

GREENE: And seasonal variation - I mean, that might have been the challenge if we were talking about a different holiday like Christmas, like Hanukkah, that falls around the same time every year. There could have been other factors at play.

VEDANTAM: Exactly.

GREENE: Well, OK, then, the conclusion that these researchers seem to be heading towards, Shankar, is that religion is bad for your country if it impedes economic growth - not something that a lot of people want to hear probably.

VEDANTAM: Well, I think the story might be more complicated than that. Campante finds that the changes in economic activity are not driven just by what happens during Ramadan, but broader changes in attitude. So Muslims who are observant seem to place greater focus of family, greater focus on social well-being rather than individual well-being. And there's survey data from more than 200,000 people in dozens of countries that produces a finding that your standard economist might not like. Here is Campante again.

CAMPANTE: Muslim individuals become more likely to report that they're happy and that they're satisfied with their lives. So in that sense, the practice of Ramadan may make people poorer as a result of the slow-down in economic activity and the way they sort of choose to change their economic behavior. But on the other hand, it seems that they are happier.

GREENE: Material versus non-material satisfaction, right?

VEDANTAM: Yeah, and I think that's the point that Campante is making, which is he's saying that policymakers might not want to use economic productivity as a sole measure of success. As he puts it, GDP is not everything.

GREENE: Shankar, thanks as always.

VEDANTAM: Thanks, David.

GREENE: That Shankar Vedantam, who regularly joins us to talk about social science research. You can follow him if you're on Twitter @HiddenBrain, and you can also follow this program @nprgreene, @NPRinskeep, and the show is @MorningEdition.

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