Religions, Human Capital and Earnings in Canada

Using the Ethnic Diversity Survey (EDS) I examine how religious belief and practice relate to earnings in Canada. I consider the impact of the degree of religiosity using a composite scored-based variable constructed by means of several questions in the survey as an explanatory variable in standard human capital-earnings function estimation. A negative correlation between religiosity and earnings is found controlling for demographic and human capital variables. I also estimate the human capital return differentials among religious denominations. The uncovered differentials are economically and statistically significant. Jews enjoy a premium and Muslims’ earnings are significantly lower compared to the average. The explanation of this gap seems to be the return to experience where the lower return to experience of Muslims is seemingly caused by the immigrant status of their great majority