The Chosen Few: Jewish Population Dynamics and Economic Transitions

1. The Chosen Few Ninth CSEF-IGIER Symposium on Economics and Institutions (CISEI) 26/06/2013 Capri

2. Ch. 1 70 C.E. to 1492: How Many Jews Were There and Where and How Did They Live? Ch. 2 Were the Jews a Persecuted Minority? Ch. 3 The People of the Book, 200 B.C.E.–200 Ch. 4 The Economics of Hebrew Literacy in a World of Farmers Ch. 5 Jews in the Talmud Era, 200–650: The Chosen Few Ch. 6From Farmers to Merchants, 750–1150 Ch. 7 Educated Wandering Jews, 800–1250 Ch. 8 Segregation or Choice? From Merchants to Moneylenders, 1000–1500 Ch. 9 The Mongol Shock: Can Judaism Survive When Trade and Urban Economies Collapse Ch. 10 1492 to Today: Open Questions

3. We document three puzzles • Jewish population dynamics 60-600 decreased 5.5 to 1.5 M 1250-1500 decreased 1.2 to 0.8-1.0 M • Occupational selection (750-900, Muslim Middle East) Jews left farming and entered urban, skilled occupations • Jewish Diaspora and minority status (800-1200) The migrations of Jewish *skills*

5. Jewish Population Dynamics

6. Jewish occupational transition

7. Ch. 1 70 C.E. to 1492: How Many Jews Were There and Where and How Did They Live? Ch. 2 Were the Jews a Persecuted Minority? Ch. 3 The People of the Book, 200 B.C.E.–200 Ch. 4 The Economics of Hebrew Literacy in a World of Farmers Ch. 5 Jews in the Talmud Era, 200–650: The Chosen Few Ch. 6From Farmers to Merchants, 750–1150 Ch. 7 Educated Wandering Jews, 800–1250 Ch. 8 Segregation or Choice? From Merchants to Moneylenders, 1000–1500 Ch. 9 The Mongol Shock: Can Judaism Survive When Trade and Urban Economies Collapse Ch. 10 1492 to Today: Open Questions

8. The Chosen Few: Why? • Jewish Population Dynamics 65 C.E. - 1492 from 5.5 to 1 M Common answer: “Jews were oppressed and persecuted…” • Occupational Selection 750-900 to today Common answer: “Restrictions on minority…” • Jewish Diaspora and Minority Status Common answer: “ Jews were forced to leave…”

9. Why are the Jews merchants, urban dwellers, entrepreneurs, money lenders and doctors? Economic Restrictions(e.g., Cecil Roth) Persecutions & Portable Human Capital(e.g., Brenner & Keefer) The Economics of Small Minorities(e.g., Weber ; Kuznets; Slezkine)

10. Is there a common factor behind the three historical patterns? Our answer A shift in the religious norm after 70 brought these long-term economic and demographic outcomes

11. Ch. 1 70 C.E. to 1492: How Many Jews Were There and Where and How Did They Live? Ch. 2 Were the Jews a Persecuted Minority? Ch. 3 The People of the Book, 200 B.C.E. – 200 Ch. 4 The Economics of Hebrew Literacy in a World of Farmers Ch. 5 Jews in the Talmud Era, 200–650: The Chosen Few Ch. 6From Farmers to Merchants, 750–1150 Ch. 7 Educated Wandering Jews, 800–1250 Ch. 8 Segregation or Choice? From Merchants to Moneylenders, 1000–1500 Ch. 9 The Mongol Shock: Can Judaism Survive When Trade and Urban Economies Collapse Ch. 10 1492 to Today: Open Questions

12. First “historical accident”, 70

13. First “historical accident”, 70

14. First “historical accident”, 70

15. Ch. 1 70 C.E. to 1492: How Many Jews Were There and Where and How Did They Live? Ch. 2 Were the Jews a Persecuted Minority? Ch. 3 The People of the Book, 200 B.C.E.–200 Ch. 4 The Economics of Hebrew Literacy in a World of Farmers Ch. 5 Jews in the Talmud Era, 200–650: The Chosen Few Ch. 6From Farmers to Merchants, 750–1150 Ch. 7 Educated Wandering Jews, 800–1250 Ch. 8 Segregation or Choice? From Merchants to Moneylenders, 1000–1500 Ch. 9 The Mongol Shock: Can Judaism Survive When Trade and Urban Economies Collapse Ch. 10 1492 to Today: Open Questions

16. Based on economic theory: What are the implications of the change in religious norms? Model: Hebrew literacy has no economic returns for subsistence farmers but religious (utility) returns for Jews. School is costly. • Jewish farmers decide whether to send boys to school (synagogue) and whether to convert to other religions • Jews are heterogeneous in religiosity, income, ability, etc. Result 1:Some Jewish farmers educate their boys. • Non-Jews farmers do not educate their boys. • Cost of education cause some Jewish farmers to convert- Who? low attachment, low ability, low income: ammei-haaretz… • Implication: In the long run Judaism cannot survive in a subsistence farming society.

17. Model (continued) • Result 2:Jewish farmers who learn in synagogue to read (write) have a comparative advantage in occupations and locations in which reading, writing contracts and communication have high economic returns.

18. Testable implications on conversions and Jewish population dynamics At a given point in time: • Heterogeneity among Jews (x, γ, θ, e), some Jewish farmers do not educate their children and convert • More conversions occur when aggregate economic conditions are bad (low wF, high τrF) and in small communities (high γ) • In the long-run,Judaism cannot survive in a subsistence farming society as Jewish farming population is decreasing. • Reduction in Jewish population can be halted: • with increased demand for literate occupations: Expansion of urbanization and trade 2. with migrations to opportunities

19. Ch. 1 70 C.E. to 1492: How Many Jews Were There and Where and How Did They Live? Ch. 2 Were the Jews a Persecuted Minority? Ch. 3 The People of the Book, 200 B.C.E.–200 Ch. 4 The Economics of Hebrew Literacy in a World of Farmers Ch. 5 Jews in the Talmud Era, 200–650: The Chosen Few Ch. 6From Farmers to Merchants, 750–1150 Ch. 7 Educated Wandering Jews, 800–1250 Ch. 8 Segregation or Choice? From Merchants to Moneylenders, 1000–1500 Ch. 9 The Mongol Shock: Can Judaism Survive When Trade and Urban Economies Collapse Ch. 10 1492 to Today: Open Questions

20. Jews in the Talmud Era (200-650): TheChosenFew[children’s education] • In subsistence farming economy: investment in children's education is a costly religious sacrifice with no economic return • A typical family’s budget in Roman Palestine • food expenses = 40-50% • taxes = 30% • little was left to buy clothing, books, paying teachers and build synagogue

21. Cost of living (in denarii), 1st-3rd centuries

22. Despite being costly, primary education/literacy became spread in Jewish communities from 200 to 650 EVIDENCE Many rulings in the Talmud on school and teacher - Judaism unique Archeological findings on synagogues Growth of academies in Babylon: more students with primary education The Kallah From 6th century: Responsa

23. Sample of synagogues, ca. 200-500

24. Jews in the Talmud Era (200-650): TheChosen Few[conversions] • Evidence from population dynamics, c. 1-650 • Evidence from literary and epigraphic sources, 1-325 • Evidence from literary sources, 325-650

25. Revolt in Egypt (115) Great revolt, Temple (70) Bar Kokhba revolt (135)

26. Jews in the Talmud Era (200-650): TheChosen Few[conversions] • Evidence from population dynamics, c. 1-650 • Evidence from literary and epigraphic sources, 1-325 • Locations with Christians included also Jewish populations: Only from 150 Christians were not considered Jewish. • Evidence from literary sources, 325-650 • Laws protecting Jewish converts

27. Ch. 1 70 C.E. to 1492: How Many Jews Were There and Where and How Did They Live? Ch. 2 Were the Jews a Persecuted Minority? Ch. 3 The People of the Book, 200 B.C.E.–200 Ch. 4 The Economics of Hebrew Literacy in a World of Farmers Ch. 5 Jews in the Talmud Era, 200–650: The Chosen Few Ch. 6From Farmers to Merchants, 750–1150 Ch. 7 Educated Wandering Jews, 800–1250 Ch. 8 Segregation or Choice? From Merchants to Moneylenders, 1000–1500 Ch. 9 The Mongol Shock: Can Judaism Survive When Trade and Urban Economies Collapse Ch. 10 1492 to Today: Open Questions

28. If all Jews were literate in 650, why were they still farmers in 650? Given rural subsistence economies in 4th-7th centuries, literate Jewish farmers could not find urban skilled occupations

29. Second “historical accident”, c. 632 Mohammed established Islam and set the foundations of one of the largest, most urban, and commercially developed empires in history

30. Urbanization expanded in newly established Abbasid Empire

31. Jewish occupational transition: WHY?(it took 150 years --- consistent with other evidence)

32. Why almost all Jews became urban dwellers (750 to 900)? The Economic Return to Jewish Religious literacy • Literacy: knowledge of one language – Hebrew – enable to learn other languages (Hebrew-Arabic, Hebrew-French, Ladino, Yiddish) based on Geniza documents. • Languageenables to write commercial contracts and loans across locations. Jewish lawenables to implement agreements. • The common language enables to expand mail network for religious, family andcommercial contactsbased on Jewish law and community penalties (Greif). • The language enablesJewish artisans to write contractsfor the production of shoes, clothes and other personal items

33. The theory of Jewish merchant: education and conversion • Assumption: Merchants income increases from theirs and their son education • Merchant's budget constraint: c + γ(es)θ + τrM≤ wF(1 + Aesα e1-α) Results: • Education:Jewish merchants invest more than non-Jewish merchants in children's education. WHY? • Conversion: • If taxes for Jewish and non-Jewish merchant are the same – no Jewish merchant will convert. (ii) Over time, the proportion of merchants among Jews will increase.

34. Education: tons of evidence from Genizah and Responsa (900-1250) of almost 100% literacy among Jews. No or few conversions of Jews from 700 to 1200

35. Ch. 1 70 C.E. to 1492: How Many Jews Were There and Where and How Did They Live? Ch. 2 Were the Jews a Persecuted Minority? Ch. 3 The People of the Book, 200 B.C.E.–200 Ch. 4 The Economics of Hebrew Literacy in a World of Farmers Ch. 5 Jews in the Talmud Era, 200–650: The Chosen Few Ch. 6From Farmers to Merchants, 750–1150 Ch. 7 Educated Wandering Jews, 800–1250 Ch. 8 Segregation or Choice? From Merchants to Moneylenders, 1000–1500 Ch. 9 The Mongol Shock: Can Judaism Survive When Trade and Urban Economies Collapse Ch. 10 1492 to Today: Open Questions

36. Voluntary DiasporaMigrations of Jewish *skills*, ca. 800-1250 • Main insight from the model Judaism can survive in the long run only if Jews can find occupations with high returns to their investment in education • Historical evidence The voluntary migrations of Jewish people between 800 and 1250 support this argument

37. Migrations within the Muslim Empire (800-1100) voluntary and free • Jewish craftsmen, traders, physicians, scholars from Mesopotamia and Persia settled in Syria, Egypt, Maghreb, Spain, and Sicily • The “golden age” of Jewish history Migrations to western Europe (850-1250) voluntary and regulated • Jews migrated to England, Flanders, France, Germany, Italy upon invitation by local rulers --- wealthy communities in hundreds of towns • Because of high human capital and skills, Jews viewed as essential for economic growth • No restrictions on Jewish economic activities

38. Sample of Medieval Charters

39. The zenith of the Jewish Diaspora From the travel itinerary of Benjamin de Tudela (c. 1170) • In Muslim Mesopotamia and Persia: 70 percent of world Jewry • Muslim Iberian Peninsula: wealthy Jewish communities in hundreds of cities and towns (Sephardim) • France, England, Germany: prominent Jewish communities in hundreds of locations (Ashkenazim) • Jewish communities all over Italy, Bohemia, eastern Europe, Turkey, the Middle East, Egypt, the Maghreb, all the way to central Asia, China, and India

41. Genetic distance and conversions • 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

42. Ch. 1 70 C.E. to 1492: How Many Jews Were There and Where and How Did They Live? Ch. 2 Were the Jews a Persecuted Minority? Ch. 3 The People of the Book, 200 B.C.E.–200 Ch. 4 The Economics of Hebrew Literacy in a World of Farmers Ch. 5 Jews in the Talmud Era, 200–650: The Chosen Few Ch. 6From Farmers to Merchants, 750–1150 Ch. 7 Educated Wandering Jews, 800–1250 Ch. 8 Segregation or Choice? From Merchants to Moneylenders, 1000–1500 Ch. 9 The Mongol Shock: Can Judaism Survive When Trade and Urban Economies Collapse Ch. 10 1492 to Today: Open Questions

43. Why Money Lending? • Money lending is another form of commerce – highly sophisticated; need contracts; enforcement; arbitration; capital. • High interest rates on short term lending. • Arbitrage among locations. • High risk and high return • Permits and taxes to rulers – set in Privileges. Was it due to land restrictions? NO! Was it due to usury bans on Christians?

45. Ch 1 Jewish population, locations, and occupations Ch 2 A persecuted minority? Ch 3 The people of the book (c. 200 BCE — 200 CE) Ch 4 The economics of Hebrew literacy in a world of farmers Ch 5 Jews in the Talmud era (200-650 CE): the chosen few Ch 6 From farmers to merchants (c. 750-900) Ch 7 The educated wandering Jew (c. 800-1258) Ch 8 From merchants to moneylenders: selection or segregation? Ch 9 The Mongol shock: Can Judaism survive when trade and urban economies collapse? Ch 10 1492 to today: open questions

46. Third “Historical Accident”, 1258 The Mongol Shock (Could the Jews be farmers in the long-run?) • The Mongols invaded Persia (earliest 1220) and Mesopotamia in 1256-1260 and destroyed the urban economy • Because of massacres, starvation, epidemics, total population was reduced by half • Jewish population shrank from about 800 thousands to nearly 200-300 thousands

47. Jewish Population Dynamics

48. No evidence they migrated in huge numbers to western Europe (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 in Jewish population in Muslim Middle East was the outcome of voluntary conversions Conversions among low-income Jews when the economy became a subsistencefarming economy support our main insight

49. Ch. 1 70 C.E. to 1492: How Many Jews Were There and Where and How Did They Live? Ch. 2 Were the Jews a Persecuted Minority? Ch. 3 The People of the Book, 200 B.C.E.–200 Ch. 4 The Economics of Hebrew Literacy in a World of Farmers Ch. 5 Jews in the Talmud Era, 200–650: The Chosen Few Ch. 6From Farmers to Merchants, 750–1150 Ch. 7 Educated Wandering Jews, 800–1250 Ch. 8 Segregation or Choice? From Merchants to Moneylenders, 1000–1500 Ch. 9 The Mongol Shock: Can Judaism Survive When Trade and Urban Economies Collapse Ch. 10 1492 to Today: Open Questions

50. 1492 to Today: Open Questions • Circa 1492 world Jewry: less than 1 million people • 450,000 Sephardim (urban skilled occupations) Spain, North Africa, Greece, Turkey, Middle East, Iraq, Persia • 450,000 Ashkenazim (urban skilled occupations) • Germany, Netherlands, Italy, eastern Europe, Russia • Circa 1938 world Jewry: about 16.5 million • 2.2 million Sephardic Jews • 14.3 million Ashkenazi Jews (spectacular growth in eastern Europe) • Why this divergent demographic trend?