From Farmers to Merchants, Voluntary Conversions, and Diaspora: A Human Capital Interpretation of Jewish History

1
From Farmers to Merchants, Voluntary
Conversions, and Diaspora A Human Capital
Interpretation of Jewish History

• Maristella Botticini Zvi Eckstein
• Boston University, Tel Aviv University,
• Universita di Torino U. of Minnesota,
  CEPR Federal Reserve Bank
• of Minneapolis
  CEPR

2
Question

• Can an exogenous change in a religious/social
  norm have long-term economic consequences?
• Jewish economic history in the past two thousand
  years enables us to answer this question.

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Three patterns to be explained

• Occupational selection (750-900 CE, Muslim
  Empire)
• Jews left farming and entered urban, skilled
  occupations JEH paper
• Demographics
• 200-600 CE Jewish population decreased (4.5 to
  1.5 M)
• 1250-1500 Jewish population decreased (1.2 to
  0.8 M)
• Demographics (800-1200 CE)
• The migrations of Jewish skills within the
  Muslim Empire and to western Europe

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Occupational Selection (750-1200 CE)
Time Location Farmers Craftsmen Merchants
0-400 CE Eretz Israel 80-90 few few
Mesopotamia 80-90 few few
Egypt 70-80 some some
Roman Empire 70-80 few few
400-638 Eretz Israel 70-80 some some
Mesopotamia 60-80 many some
Egypt ?? ?? ??
Byzantine empire ?? ?? ??
638-1170 Eretz Israel 20-30 many many
Muslim Empire 10-20 many many
Western Europe 5-10 many many
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Question Is there a common factor behind the
three historical patterns?

• Our answer
• An exogenous change (1st 2nd century CE) in
  the religious norm which defined Judaism brought
  these long-term economic and demographic
  outcomes. The destruction of the Temple and the
  raise of Pharisees.

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The Educational Reform
200 BCE 70 CE 70 -135 CE 135 200 CE
Many religious groups Pharisees stress the study of Written and Oral Torah (Law). Temple destroyed by Titus - Roman army. Pharisees became religious leaders. Christianity separated from Judaism. The Mishna (200 CE) 6 volumes of rules of daily life for Israelis farmers!
64 CE-- religious norm fathers must send sons to school to learn the Torah. Exogenous? Sacrifices replaced with study of the Torah in synagogue Leadership of rabbis AFTER 200 CE Talmud and am ha-aretz (illiterate) were considered outcast.
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Main Predictions of Economic Theory

• Cost of education for farmers with no return to
  education cause low ability, low income farmers
  to convert in the long run Judaism cant
  survive in a farming society
• Jews had a comparative advantage in occupations
  and locations where return to literacy and
  communication is high.

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A simple model of education and conversions of
farmers

• Two-period overlapping generations model with no
  pop. growth.
• 1st period the child receives education (es)
• 2nd period the adult decides his religion (j,n),
  and child's education
• Before 200 CE Jews and non-Jews have same level
  of education and income.
• After 200 change in Jewish religious
  preferences.

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• Jewish individual
• uj(c, es e, x) log c x(e1)es - eh
• Jewish individual who converts
• ujn(c, es e, x) log c px
• Non-Jewish individual
• un(c, es e, x0) log c
• x (gt0) exogenous taste parameter
• Educational reform within Judaism interaction of
  x with es and e.

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• Jewish father must provide at least emin 1 to
  his son.
• Cost of childs education ?(es)? ?
  gt0, ?gt1.
• At community level
• operating costs of synagogue, teacher's salary,
  cost of books
• At individual level
• child's intellectual ability
• opportunity cost of the time the child spends in
  school
• Education does not affect productivity and
  earnings in farming.
• Budget constraint c ?(es)? trF wF

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Testable implications on childrens education

• es 0 if x(e1) lt (??) / (wF ? - tjF) and
• if x(e1) lt log (wF tjF)/ (wF ? tjF)
  - ?
• es 1 otherwise, and es solves the equation
• x(e1) (??(es)?-1) / (wF - ?(es)? - tjF)
• At the community level
• ? large in small Jewish communities.
• negative aggregate economic shocks lower wF
• At the individual level
• families with low-ability children
• families with high opportunity costs of sending
  children to school
• fathers with low x or low e.

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Jewish farmers conversion

• Jewish farmer converts if
• log(wF - ?(es)? - tjF) x(e1)es - eh lt
  log(wF - tnF) - px
• Suppose tjF tnF
• Jewish farmers who do not educate their children,
  convert if e px 0.
• Jewish farmers who educate their sons
• do not convert even if p 0.

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Testable implications on conversions and Jewish
population dynamics

• Because of heterogeneity across individuals (x,
  ?, ?, e), some Jewish farmers do not educate
  their children and convert.
• Also, more conversions when aggregate economic
  conditions are bad (low wF, high trF) and in
  small communities (high ?).
• In the long-run Judaism cannot survive in a
  subsistence farming society as Jewish farming
  population is decreasing through conversions.
  Before 8th CE most Jews are farmers.
• Reduction in Jewish population can be halted if
  Jews could find an Occupation that provides high
  return to their investment in education/literacy
  trade and urban occupations the merchants
  society. How ?
• with increased urbanization and the expansion of
  trade from 9 CE 90 of Jews live in cities.
• 2. with migration as traders to better reach
  better earnings From 9 CE Jews are spread all
  over the globe.

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Jewish farmers before 8th century childrens
education

• In a subsistence farming economy, the investment
  in children's education is a religious sacrifice
  with no economic return.
• Safrai (1994) in Roman Palestine
• food expenses amounted to about 40-50 percent of
  a family's total expenses.
• taxes took an additional 30 percent
• little was left to buy other items such as
  clothing, books, and paying for the teacher's
  salary.

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Cost of living (in denarii), 1st-3rd centuries
C.E.
Items in a household budget Eretz Israel Egypt Babylon
Monthly wage of an agricultural worker 24-48 4-32 72-96
Monthly wage of an urban skilled worker 48-72 6-40
Monthy wage of a boy on farm work --- 2-10
Monthly bread expenses (family of four) 10-20 5-10
Cattle (ox or cow) 100-200 15-100
Suit/cloak 30 ---
Monthly rent of a house 4 ---
Book 200 --- 80-120
Source Sperber (1965 1967)
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• Despite being very costly, primary education
  became widespread in the Jewish communities from
  3rd to 7th century.
• EVIDENCE?
• Many rulings and discussions in Talmud
• (see our JEH paper). Yarchi-kalaa in Babylon.
• The wealth of archeological findings on
  synagogues (new HERE).

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Sample of Synagogues, ca. 200-500
Century Locations
3rd Baram, Gush halav, Horvat, Horvat Shema, Kefar Kana, Nevoraya, En-Gedi, Eshtemoa
3rd -4th Chorazin, Gush Halav, Hammat Gader, Hammath Tiberias, Khirbet Shema, Maoz Hayyim, Meiron, Nabratein, Rehov, Horvat Sumaqa, Horvat Rimmon
4th Arbel, Capernaum, Horvat ha-Amudin, Meroth, Beth Alpha, Beth Shean, Maoz Hayim, Gaza, Horvat Susiya, Naaran, Zuminra
3rd , 5th Anim, Aphik, Dabbura, Kefar Hananiah
5th Assalieh, En Neshut, Horvat Kanef, Katzrin, Huseifa, Hirbet Amudin, Yaifia, Sepphoris
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Jewish farmers before 8th century conversions
0-65 CE 66-130 135-300 6th cent
Eretz Israel 2.5 1.7 0.7 0.2
Mesopotamia 1 1 1.2 0.8-1
Egypt 1 0.1 v few v few
Syria many many some few
Asia Minor, Balkans many many some few
Western Europe some some some v few
Total Jewish Pop 4.5-5 3-3.5 2-2.5 1.5
Total Population 59 59 55 48
J as of total pop 7 6 4.5 3
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Jewish farmers before 8th century conversions

• Eretz Israel
• Uneducated, poor Jews were early converts to
  Christianity
• Samaritans Samaritan farmers converted to
  Christianity
• Mesopotamia
• Conversions of Jews to Christianity occurred.
• The size of the Jewish population there
  decreased despite migrations from Eretz Israel.
• __________________________________________________
  ______
• Evidence that some uneducated Jews did not
  convert
• the ammei ha-aretz in Mishna and Talmud.

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Occupational Transition 750-900 CE

• Given stagnant economies in 4th-7th centuries,
  educated Jewish farmers could not find skilled
  occupations.
• But in 8th-9th centuries, urbanization expanded
  in newly established Muslim Empire.
• Occupational transition took 150 years.
• By 900, almost all Jews in Iraq, Persia, Syria,
  and Egypt, had urban occupations.
• Occupational selection remained distinctive mark
  thereafter.

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Urbanization in the Near East(in thousands)
8th 10th centuries Total Population Jewish Population
Baghdad 6001,000 200
Samarra 500 7.5
Basra 200-600 10-50
Cairo 300 10
ca. 1170
Palermo 150 7.5
Paris 110 1.5
Seville 80 many
Venice 70 ?
Granada 60 many
Cordoba 60 many
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A model of education and conversion of merchants

• Merchant's budget constraint
• c ?(es)? trM wF(1 Aesa e1-a)
• Education
• Jewish merchants invest more than non-Jewish
  merchants in children's education. WHY?
• Conversion
• If tjM tnM, no Jewish merchant will convert.
• (ii) Over time, the proportion of merchants will
  increase.

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• Education tons of evidence from Geniza and
  Responsa
• No or few conversions between 800 and 1200.

6th century 8th century ca. 1170
Eretz Israel 0.2 few 0.002
Iraq and Iran 0.8-1 0.8 0.8
Egypt v few 0.004 0.012
Syria few few 0.015
Balkans, East Europe few few 0.047
Western Europe v few v few 0.103
Total Jewish Popul 1.5 1-1.2 1.1.2
Total Population 48 51 75
J as of total pop 3 2 1.6
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Voluntary Diaspora The migrations of Jewish
skills, ca. 800-1250

• Main insight the educational requirement in
  Judaism can survive in the long run only if the
  Jews can find occupations with high returns to
  their investment in education.
• The migrations of Jewish people
• within the Muslim Empire (ca. 800-1000)
• to western Christian Europe (ca. 900-1250)
• support this argument.

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• Migrations within the Muslim Empire (800-1000)
  Voluntary and Free
• Jewish craftsmen and merchants freely settled in
  Egypt, North Africa. Muslim Spain the golden
  age.
• Migrations to western Europe (900-1200)
• Voluntary and Regulated
• Jews migrated to France, Germany, and England
  upon invitation by local rulers. Wealthy
  communities in hundreds of towns.
• Because of their high human capital and skills,
  Jews were viewed as essential for economic growth
  to the point that local rulers competed to have
  some Jews settle in their towns.
• No restrictions on Jewish economic activities.

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Sample of Medieval Charters
Country City Year of charter Own Land Trade Moneylending
Spain Barcelona 1053-1071 yes yes yes
Tudela 1116 silent yes yes
Toledo 1222 yes yes yes
Valencia 1250 yes yes yes
France --- 820 yes yes silent
--- 1190 silent silent yes
England --- 1120, 1170 yes yes yes
--- 1275 yes yes no
Germany Speyer 1084, 1090 yes yes yes
Worms 1074 silent yes silent
Worms 1090, 1157 yes yes yes
Ratisbon 1182, 1216, 1230 yes yes silent
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The height of the Jewish Diaspora

• From the travel itinerary of Benjamin de Tudela
  (1170)
• In Muslim Iraq and Iran, 80 percent of world
  Jewry.
• Muslim Spain tiny and wealthy Jewish communities
  in more than 150 cities and towns.
• France, England, and Germany small and prominent
  Ashkenazi Jewish communities lived in more than
  160 locations.
• Plus, tiny Jewish communities all over Italy,
  Bohemia, eastern Europe, Turkey, the Middle East,
  Egypt and North Africa, all the way to central
  Asia, China, and India.

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SOMETHING INTERESTING

• Contemporary Jewish populations show a closer
  genetic link to Jews from far away locations than
  to their neighboring non-Jewish populations.
• Especially the Ashkenazi Jews of eastern Europe
  are genetically closer to Jews from the Middle
  East and North Africa, as well as to other Middle
  Eastern non-Jewish populations, than to eastern
  European non-Jewish populations.
• This provides additional and independent evidence
  that there were no significant conversions to,
  and out of, Judaism once the Jews became
  merchants and migrated to western and then
  eastern Europe, and it clearly shows that the
  Jews all migrated from the same original location.

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The Mongol Shock --- Could the Jews be farmers?

• The Mongols invaded Persia and Iraq in 1256-60
  and destroyed the economy.
• Because of massacres, starvation, epidemics,
  total population was reduced by half.
• Jewish population shrank from about 800 thousands
  to about 100 thousands.

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The Mongol Shock
1170 1300 1490
Eretz Israel 0.002 v few v few
Iraq and Iran 0.8 ? 0.1
Egypt 0.012 ? 0.005
Syria 0.015 ? 0.007
Balkans, Eastern Europe 0.047 0.065 0.090
Western Europe 0.103 0.385 0.510
Total Jewish Population 1-1.2 0.8-1 0.7-0.9
Total Population 75 95 87
Jewish as of total pop 1.6 1 1
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• No evidence that Iraqi Jews migrated in large
  numbers to western Europe (REMEMBER migrations
  to Europe were regulated).
• Death rate from starvation and epidemics similar
  to local population.
• Jewish death toll from massacres by Mongols was
  lower.
• The much larger reduction was the outcome of
  voluntary conversions.
• These conversions among low-income Jews when the
  economy became again a subsistence farming
  support our main insight.

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Why do we work on this topic?

• Because it is fun (and we were too curious to
  know)
• Whats next?
• From merchants to moneylenders in medieval Europe
  ..Restrictions on Christians? NO!

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Occupational Selection (750-900 CE)
Time Location Farmers Craftsmen Merchants
0-400 CE Eretz Israel 80-90 few few
Mesopotamia 80-90 few few
Egypt 70-80 some some
Roman Empire 70-80 few few
400-638 Eretz Israel 70-80 some some
Mesopotamia 60-80 many some
Egypt ?? ?? ??
Byzantine empire ?? ?? ??
638-1170 Eretz Israel 20-30 many many
Muslim Empire 10-20 many many
Western Europe 5-10 many many
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Jewish Population Dynamics
0-65 CE 66-130 135-300 6th cent 8th cent 1170 1300 1490
Eretz Israel 2.5 1.7 0.7 0.2 few 0.002 v few v few
Mesopotamia 1 1 1.2 0.8-1 0.8 0.8 ? 0.1
Egypt 1 0.1 v few v few 0.004 0.012 ? 0.005
Syria many many some few few 0.015 ? 0.007
Asia Minor, Balkans many many some few few --- --- ---
Balkans, E. Europe --- --- --- --- ? 0.047 0.065 0.090
Western Europe some some some v few v few 0.103 0.385 0.510
Total Jewish Pop 4.5-5 3-3.5 2-2.5 1.5 1-1.2 1.1.2 0.8-1 0.7-0.9
Total Population 59 59 55 48 51 75 95 87
J as of total pop 7 6 4.5 3 2 1.6 1 1