Does A Christian Worldview Boost Economic Outcomes?

Cole Edmonson True Charity staff portrait

Cole Edmonson
Marketing Specialist
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For decades, researchers have argued that religiosity is connected to a set of characteristics that increase economic success. Numerous studies show a correlation between faith and income, educational attainment, and other positive life outcomes. However, since it’s impossible to randomly assign some people to be religious, it has been extremely difficult to determine whether faith was causing those outcomes, or merely correlated with them.

Despite the difficulty, a team of researchers partnered with a Christian ministry to randomize training in the Christian worldview and study the second-order impacts. This synopsis addresses their groundbreaking findings in a 2020 peer-reviewed paper entitled Randomizing Religion: The Impact of Protestant Evangelism on Economic Outcomes.

What question does this research answer?

 

The study asks: What economic impact does religiosity have on otherwise ultra-poor households?

Interested in approaches beyond material aid that reduce poverty — secular researchers studied the effects of an International Care Ministry program that empowers local pastors to lead a 15-week theology and values program in their churches in the Philippines. Changes in religiosity, work attitudes, and livelihoods were measured at six and 30 months after the program.

Study Design

 

Sample: 320 communities were studied, consisting of 7,999 Filipino households identified as ultra-poor (the poorest 25 households selected by pastors in each geographic community). Of these, 5,878 households were successfully interviewed.

 

Method: A Randomized Controlled Trial (RCT) was implemented, meaning local communities were randomly chosen to receive, or not receive, the intervention. This random assignment is the gold standard for research and allows us to say the results are causal rather than merely correlated. Surveys were taken at six months and 30 months after the program.

 

Intervention: Pastors led a 15-week theology and values program designed to increase religious intensity and shape attitudes about work and purpose. While the ministry in question normally teaches health and livelihood courses as well, this study focused on the results of their religious curriculum only.

 

Limitations: This study was rigorously designed, published in a top-tier journal, and has been cited frequently. However, it studies one particular Christian worldview program implemented in a single cultural context. Thus, the exact strength of these effects will vary in other places and programs. Notably, about 97% of people studied considered themselves at least somewhat religious prior to the study, so the training strengthened or altered their pre-existing religious beliefs.

 

Key Findings

 

Very significant short-term income gains

At six months after training completion, households exposed to the program had increased their income by an average of 9.2%. In the world of poverty alleviation, this impact is quite sudden and large. It’s larger than boosts typically found from other common interventions like vocational skills training, microfinance, unconditional cash transfers, or health interventions.

The mechanism of income boost was not a result of working more hours; rather, participants earned more money in the same amount of time. Some of this was due to them shifting their work from agriculture to enterprise, some was due to higher hourly output.

 

Increased grit led to higher productivity

The main change in attitudes among the participants was measured as an increase in perseverance of effort, also called “grit.” Specifically, they were more likely to agree with statements like “I finish whatever I begin,” “setbacks don’t discourage me,” and “I am a very hard worker” after they completed the training. Researchers connected this change in attitude to increased productivity as a means to explain the income boost.

 

Perceptions of economic condition decreased in the short run and increased in the long run

At six months, participants rated themselves as slightly worse off relative to their peers than they had at the outset. Researchers attributed this primarily to increased exposure to the less-poor, which caused them to more accurately assess their relative standing. However, at 30 months, their perception of their relative standing had increased, which may capture the effect of real gains in material prosperity due to their higher income.

 

Practical Application 

 

For nonprofits and ministries, this research affirms that apart from material aid, worldview and values-based training can have tangible economic effects. It may cultivate noncognitive skills such as grit and perseverance — which can translate into improved income.

Many people in poverty feel they have very little control over their own situations. While this is true in many respects, it is all the more important that people in poverty have a sense that their work matters, and that traits like perseverance will generally lead to better outcomes.

Importantly, the best way to teach this is not to promise results outside of our control, but rather to emphasize biblical principles like “work heartily, as for the Lord and not for men knowing that from the Lord you will receive the inheritance as your reward.” (Col 3:23). Spiritual results are guaranteed, material prosperity is not, though it often accompanies diligence. Furthermore, when people demonstrate their commitment to those beliefs with action, our programs should reward and subsidize that effort to reinforce the acquisition of virtue.

Christian principles are a poverty alleviation super-power that churches and faith-based ministries should embrace, not apologize for. Additionally, they should fiercely guard their independence and reject any funders who deter faith integration into their programs.

The other effect this research captures is that changing expectations often complicates measurement. People in poverty tend to have fewer connections and less understanding of what a flourishing life looks like. Successful programs expose them to opportunities and connections that raise their aspirations for themselves and their families. In the short run, this may lead to a painful feeling of being far behind. However, in the end, perceptions of stability increase as people start to make progress toward loftier goals than they previously dared to dream.

Conclusion

 

This study demonstrates religious teaching can do more than shape beliefs — it can influence economic outcomes. Therefore, practitioners should not shy away from incorporating a Christian worldview in their program design. While the strongest effects appeared in the short run—and more work is needed to understand long-term outcomes—the study suggests shaping outlook and purpose can be just as critical as meeting material needs. For organizations seeking to fight poverty effectively, integrating the Christian worldview and values training offers the best path to flourishing.

 

Read the Study

 

Randomizing Religion: the Impact of Protestant Evangelism on Economic Outcomes

 

Who Has the Most Friends? New Research on Social Capital by Income Level

Amanda Fisher
Community Engagement Director
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Scientific research is a valuable resource for learning about charitable programs’ best practices. Often, a well-designed study does a better job of confirming or disproving our assumptions than anecdotal observations or deliberate outcomes measurement. This synopsis addresses the connections between individuals’ social capital and income in the working paper entitled The Distribution of Social Capital Across Individuals and Its Relationship to Income.  

What question does this research answer?

What connections exist between individuals’ social capital and income?

One can find people who claim that lower-income populations have stronger social capital based on the belief that they maintain tight social networks to survive. The more prevalent claim is that the wealthier have more connections. Prior to this research, there was no empirical way to know which claim was true.

Several studies address social capital, but the information up to the point of this study gives general trends based on states. None observe social capital by individual demographics such as age, sex, education, race, and ethnicity. This study aggregates existing datasets to develop an individual measure of social capital. From these datasets, these six social capital domains were considered: community engagement, religious involvement, social connection, family strength, work, and social trust. 

Study Design

Data Source: AEI Economic Policy Working Paper Series

Sample Size:  

Nearly 200K respondents of the 2019 Current Population Survey Annual Social and Economic Supplement, the Volunteer and Civic Life Supplement, the 2019 American Time Use Survey, and the 2018 General Social Survey

Type of Study:

This is an “observational study,” which means researchers observe the apparent effect of an intervention without determining who does and does not receive the intervention. 

For example, a study could observe that a sample of people with higher levels of education tend to have higher incomes than people with less education. However, simply showing a correlation is insufficient to prove education caused the higher income. It may be that people with more income pursue more education or some third factor, like ambition, causes people to earn more income and pursue more education. A well-designed observational study will attempt to eliminate obvious third causes but will not be able to fully prove the intervention caused the apparent outcome.

Limitations:

Because this study is observational, correlations may be made among the data but conclusions about causation cannot be made. For example, while a $10,000 government transfer correlates with a decrease in social capital, one cannot conclude the transfer caused the decrease in social capital. Such a deduction may be logical, but the study does not provide causal evidence to support that claim.

Additionally, unlike other economic variables, like educational attainment, “social capital” doesn’t have a uniform definition. The authors defend the six components of their index well, but there is still room for debate about whether they have captured the best indicators of social capital.

Key Findings

 

1. The main finding is that social capital increases as income increases, but there is a greater gap between the poor and middle class than there is between the middle and upper-income brackets. Another important finding shows that while increased income is important in its
relationship to social capital, the source of income matters. Individuals who receive government assistance have less social capital than people who earn $10,000 from working.

2. The largest differences in social capital occur across educational lines. Think: higher education = higher social capital. 

3. Social capital varies by race and ethnicity but does not vary significantly by gender. At nearly all education levels, non-Hispanic whites have more social capital than Hispanics, who have more than non-Hispanic blacks. The notable exception is non-high school educated Hispanics outperform similarly educated people of other ethnicities. See Figure 2.

4. The source of the increase in income is important. When there is a government cash transfer of $10,000 to an individual, social capital decreases. When there is a market-based increase to an individual of $10,000, social capital increases. See Figure 5.

 

Practical Application 

 

While this study does not claim low social capital causes poverty or vice versa, other studies prove it is central to economic mobility. These two findings should inspire ministries to better support individuals in building social capital. By implementing new programs — or improving upon their current ones to prioritize relationship-building — they can help alleviate poverty. Incorporating mentoring programs or training volunteers to foster meaningful relationships with participants can be vital first steps, and offering paths to increased education may be a longer-term solution.

Another key takeaway applies to charity workers considering use of government assistance to aid the poor  — and policymakers considering legislation to increase those subsidies. This study suggests that government transfers are linked to a decline in social capital, while income from employment tends to increase a person’s social connectedness. This is understandable — financial support from the government does not require personal relationships, while income earned through the marketplace can result in building connections with co-workers and other opportunities to serve in the community. It is worth noting the negative effects can be mitigated with work requirements for recipients of government transfers. 

Conclusion

Important connections exist between social capital and income. While individuals working in poverty alleviation likely know and understand these connections anecdotally, this research backs up their intuition. Further, these connections are vital for charity workers as they implement programs — and for policymakers considering government program expansion to the poor.

Read the Study

https://cosm.aei.org/the-distribution-of-social-capital-across-individuals-and-its-relationship-to-income/

 

When Social Capital Moves in Next Door: The Best Evidence on Gentrification

Nathan Mayo staff portraitNathan Mayo
Vice President of Operations & Programs
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Scientific research is a valuable resource for learning about charitable programs’ best practices.   Often, a well-designed study does a better job of confirming or disproving our assumptions than anecdotal observations or deliberate outcomes measurement. In that vein, this synopsis addresses the findings of a 2019 study entitled, The Effects of Gentrification on the Well-Being and Opportunity of Original Resident Adults and Children.

What question does this research answer?

“What is the effect of gentrification on the original residents of a neighborhood?”

Gentrification is generally understood as the in-migration of higher-income residents to a previously working-class neighborhood (though this study uses education level instead of income). Those seeking to serve the poor usually considered it a problem, on the grounds that it fractures existing communities and drives the displaced to a worse situation. Even the term is slightly derogatory as it facetiously refers to a neighborhood being taken over by “the gentry.” Previous evidence suggests that in-migration increases the average cost of rent and that many original residents end up leaving. 

However, previous studies only identified effects on the neighborhood as a whole, which obscures important findings on how individuals fare. This study used millions of data points to track individuals over time and compare their outcomes to people in similar neighborhoods who did not experience gentrification.

The findings offer a surprising vindication of gentrification as a natural tool for community development. Anyone in neighborhood-centric ministry needs to be aware of these stunning results. 

 

Study Design

Data Source: U.S. Census long form and the American Community Survey

Sample Size: 3 million individuals across the 100 largest metropolitan areas in the U.S.

Type of Study: 

This study is closest to a “natural experiment,” meaning researchers observe the apparent effect of an intervention while using some external event to simulate random assignment into treatment and control groups. This makes the study as close to a scientific laboratory experiment as can be achieved in the real world.

For example, if you want to determine whether higher levels of education cause higher incomes, a traditional experiment would take a group of similar high schoolers and assign some of them to go to college, while the remainder do not. Then we could measure differences in their lifetime earnings and determine the value of education.

Because such a study is impracticable, an alternative would be to compare people who gain entrance into a college by a single point on a standardized test versus those who are ineligible by a single point and do not attend. Since people with similar scores are very similar, this would allow researchers to simulate an experiment and potentially prove a college education causes higher income.

In the case of the 2019 gentrification study, researchers designated the natural control group as similar neighborhoods, some of which gentrified over the course of the study and some that did not. They then treated the people in non-gentifying working class neighborhoods as a comparison group, which gave a good sense of what resident outcomes would look like if gentrification never happened. 

Limitations: This wasn’t a pure natural experiment, since it’s possible some relevant characteristic differentiated the residents of gentrifying neighborhoods from similar non-gentrifying ones. However, there is no obvious logical reason why they should be dissimilar and researchers did their best to mitigate that potential flaw with an exhaustive set of statistical techniques.

That said, while the study focused on economic harms, it can’t account for unmeasured harms to holistic well-being (like the mental strain of being pressured to move to a new neighborhood). Still, economic harms (or lack thereof) are significant to note because most who oppose gentrification claim them as a key reason for their resistance.

Key Findings

 

 1.  Even in non-gentrifying neighborhoods, 70% of renting residents move out within a decade

One of the facts muddling previous analyses is that people routinely move out of non-gentrifying neighborhoods. Indeed, over the course of a decade 70% of renting residents move out of low-income neighborhoods where the income level of the community is stable over time. Homeowners move out at a lower rate of 40%. 

In non-gentrifying neighborhoods, those residents were backfilled by other working-class people. In gentrifying neighborhoods, higher-income people replaced the natural emigrants. While the neighborhood composition changed, it would be incorrect to say most of those who left were “forced out” because they were leaving anyway. Note that this study focused on major cities, so this may not be true in rural areas.

2.  Gentrification modestly increased outmigration but in many measurable ways movers end up no worse off 

Certainly some low-income people leave as a result of gentrification; just not as many as you would expect. The research estimates that over a decade, gentrification forces out four to six percent of the original residents. Compared to the 70% of renters that would have left anyway, that is not dramatic. 

The research also addressed what happened to those who left. On average, they ended up in similar non-gentrifying neighborhoods in the same city. Their rent, income, employment, and commute were otherwise unaffected. They would have incurred some moving expenses and perhaps some intangible costs such as being forced to move farther away from existing friends and family. 

3.  Less-educated residents who remain in gentrifying neighborhoods end up better off

Gentrification typically raises concerns about increased rent. Yet if a set of swanky apartments are built in your neighborhood, average rent may rise — but that doesn’t mean yours will. It turns out low-income renters do not see any increase in their rent due to gentrification. Instead, increases stay on course with equivalent non-gentrifying neighborhoods in their city.

There’s more good news. Less-educated homeowners see an average rise in property values of $55,000, of which $15,000 is due to gentrification.

And, neighborhood poverty decreases, which benefits adults’ physical and mental health as well as children’s lifetime education and earnings. While the majority of original residents don’t stick around long enough to see those benefits, the effects on those who do are so large that there is still a significant reduction in poverty exposure to the “average original resident.”

 

Practical Application 

Community development leaders often find themselves in a quandary: helping a run-down neighborhood improve often means higher-income people move in and many original residents leave. It’s hard to know whether to celebrate the change or lament it.

While this study confirms their instincts that the community changes, it also affirms there are net beneficial outcomes that should be maximized. Thus, they should consider the following approach:

  • Help as many original residents as possible stay, preferably by building paths to home ownership while home values are still rising.
  • Bridge relationships between new high-income arrivals and original residents. Welcome new arrivals and integrate them into efforts to build strong community bonds. This natural opportunity to build social capital may also help some of the originals decide (or be able) to stick around.
  • When possible, connect departing residents with resources to assist their transition to another community. But remember that nine out of ten would have left even if gentrification didn’t occur.   
  • Be ready to pack up shop. You may wake up one day and realize your calling has migrated across town. Don’t be so tied to a place that you can’t follow the need. Celebrate what’s happened — and move on.

Conclusion

The conventional wisdom on gentrification appears to be wrong. The best evidence shows it forces relatively few people to move, has a largely neutral impact on those who do, and brings large positive benefits to those who stay. It is a powerful force that community developers shouldn’t block but channel to do the most good for the greatest number of people.

Read the Study

The Effects of Gentrification on the Well-Being and Opportunity of Original Resident Adults and Children by Quentin Brummet, Davin Reed :: SSRN

 

Why Some Neighborhoods Help People Escape Poverty

Amanda Fisher
Community Engagement Director
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Scientific research is a valuable resource for learning about charitable programs’ best practices. Often, a well-designed study does a better job of confirming or disproving assumptions than anecdotal observations or deliberate outcomes measurement. This synopsis addresses the findings of a 2022 study entitled Social Capital I: Measurement and Associations with Economic Mobility.

What Question Does This Research Answer?

What impact does social capital have on upward economic mobility?

The study surveyed data across 21 billion friendships on Facebook to examine the effects of three kinds of social capital (or social connectedness) on upward economic mobility: cross-type economic connectedness (relationships between those with low vs high socioeconomic status); social cohesion (i.e., cliques in friendship networks and how many friends are friends with each other); and civic engagement (i.e., volunteering).

Study Design

Data Source: Facebook

Sample Size: The data is based on 72.2 million Facebook users ages 25-44 in the United States across 21 billion “friendships.”

Type of Study: This is an observational study, which means researchers observed the apparent effect of an intervention without determining who does and does not receive the intervention. 

Limitations: Because this is a natural experiment rather than a randomized control trial, the results can only suggest correlation rather than causation. Additionally, as correlations are made, one must be cautious of using Facebook to provide a comprehensive picture of one’s social network’s breadth and depth. 

Key Findings

  • Of the three types of social capital examined, cross-type economic connectedness is the most important in predicting upward economic mobility. “If children with low socioeconomic status parents were to grow up in counties with economic connectedness comparable to that of the [typical] child with high socioeconomic status parents, their income in adulthood increases by 20% on average.” 
  • Economic connectedness in a community is the single best population-level predictor of whether children who grow up there will be upwardly mobile. It is more significant than neighborhood median income, degree of racial segregation, income inequality, math test scores, and the ratio of single-parent households (which still matter, just to a lesser degree). In fact, the study suggests economic connectedness is such a significant factor that, regardless of ZIP code, nearly all variations in income mobility outcomes for children can be explained by economic connectedness.
  • In-group cohesion may have other benefits not evaluated by this study, but it’s not a significant driver of economic mobility.
  • Almost none of the lowest-income ZIP codes in the US exhibited high levels of economic connectedness. If there were a few higher socioeconomic status individuals in the vicinity, there appeared to be very little opportunity for people with low socioeconomic status to connect with them. This echoes the observation of sociologist Peter M. Blau that “persons cannot associate without having opportunities for contact.”

Practical Application 

Poverty is complex, so it’s refreshing to find a study that demonstrates factors other than one’s ZIP code that affect upward economic mobility. All else being equal, it’s common knowledge kids in poor neighborhoods have worse life outcomes than kids growing up in better ones. Therefore, it’s significant this study strongly suggests neighborhood effects can be entirely offset by increasing economic connectedness. Of equal importance, it provides a very tangible focus point to help neighborhood development organizations prioritize an overwhelming list of things they could help improve.

As well, the study supports a True Charity basic belief that relationships are a key antidote to poverty and are vital in breaking generational cycles of poverty. These findings should persuade those of higher socioeconomic status–especially within the church–to open themselves to bonding with those of lower socioeconomic status. Doing so will create an environment that fosters sincere, caring relationships.

Because these connections are essential for upward mobility, we must continue to emphasize bridging social capital through mentoring and other relationships. This study clearly shows the importance of implementing programs that promote economic connectedness, such as Circles USA or Faith and Finances. 

The research also supports the need for training volunteers to build relationships with people in need (as opposed to simply completing tasks on their behalf). 

Finally, one must be careful about insinuating higher socioeconomic status or upward economic mobility equals flourishing. Benefits to engaged, clustered societies beyond income mobility should be considered.

Conclusion

Churches and nonprofits must focus energy on building relationships with individuals struggling in poverty–specifically, bonding with those of a different socioeconomic status. Join the True Charity movement for practical tools and tips on how to get started or improve your current charitable efforts.

Read the Study

You can access it here:  Social Capital I: Measurement and Associations with Economic Mobility.

Also, explore the data for your specific area through this helpful tool.

 

Do Holistic, Individualized Programs Really Make a Difference? Let’s Look at the Research.

SONYA STEARNS
Network Manager
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Scientific research is a valuable resource for learning about charitable programs’ best practices. Often, a well-designed study does a better job of confirming or disproving our assumptions than anecdotal observations or deliberate outcomes measurement. This synopsis addresses the findings of a 2023 working paper entitled Fighting Poverty One Family at a Time: Experimental Evidence from an Intervention with Holistic, Individualized, Wrap-Around Services.

What question does this research answer?

“How does holistic, individualized wrap-around intervention affect outcomes for a broad population of low-income individuals?”

This study examines the impacts of the Padua Program on individuals and families facing poverty. Its wrap-around services (or holistic support services) are characterized by a comprehensive, personalized approach that addresses participants’ primary needs (such as housing, employment, and financial stability). Padua’s case management is asset-based and relational, meaning case managers empower participants based on strengths and abilities they bring to the table. The findings reveal Padua participants experienced significant improvements in employment outcomes with higher rates of full-time employment and increased monthly earnings. It also positively affected housing stability and physical health; and reduced reliance on government programs. In short, the program demonstrates the value of interventions tailored to the unique needs of participants, emphasizing the importance of a holistic approach to poverty alleviation.

Study Design

Data Source:
Catholic Charities of Fort Worth (CCFW)
Padua Program asked Notre Dame’s Sheehan Lab for Economic Opportunities (LEO) to study participants who entered their program from February 2015 through October 2016.
Sample Size:
The study included 427 participants. Of those, 193 were placed in the treatment group and 234 in the control group. Participants were in the program for an average of seventeen months.
Type of Study:
This study was a “Randomized Controlled Trial (RCT),” which means researchers select a random sample of people who receive intervention (the treatment group) and a random group who do not (the control group).
For example, if your thesis is higher education causes higher income, you could provide free scholarships to a random group of students and compare their outcomes to students who do not receive a scholarship. RCT is considered the gold standard for proving intervention causes the outcome (versus being a correlation of it).
Limitations:
Due to the study’s small size, the components of the Padua program that drove positive outcomes could not be determined. Additionally, while the study proved the program’s efficacy, it did not settle the question of whether other organizations’ use of Padua would achieve similar results. Some elements, like the skill level of the case managers, could be difficult to replicate.

Key Findings

  1. Unemployed individuals saw favorable workforce outcomes from the Padua program.
    Participants who entered the program without employment were 67% more likely than the control group to be employed full-time after twenty-four months. They also experienced a 46% increase in earnings, earning $420 more per month than individuals in the control group.
  2. Families saw a stabilization in their situation through housing.
    Participants who entered the Padua program without stable housing saw a stabilization of their situation after 24 months. In fact, they were 60% more likely to achieve it than the control group.
  3. Intense, asset-based case management helped increase their ability to participate more fully in a community (through jobs, stable housing, education, etc.) and improved their health.
    In a qualitative survey, forty-three percent self-reported improved mental, physical, relational, and emotional health. Even without objective data, the individuals perceived better overall well-being, indicating improved mental and emotional stability.
  4. Targeted and longer durations of case management were initially more costly per individual but were likely more economical for service providers in the long run.
    Case management in the Padua program costs almost $23,000 per individual over two years. Initial upfront costs for relational case management are higher because each case is targeted (that is, each client’s unique assets, liabilities, and situation are considered). Pauda suggests that investment leads to fewer clients returning to the program, leading to cost savings over time.

Practical Application

The treatment group in the Padua Program achieved better long-term self-sufficiency than those in the control group. The success of the program suggests its holistic approach may produce similar results for your organization. Here are a few highlights to consider for your program:

  1. Intense case management and small caseloads are the foundation for success because they foster commitment and relationship.
    Our Case Management Toolkit provides everything you need to implement asset-based, relational case management in your own context.
  2. Prioritize stabilized living situations for job seekers.
    As demonstrated, those in the treatment group with stable housing secured jobs more readily and increased their wages more substantially than the control group. This suggests achieving overall stability is sequential–with housing a higher initial priority than boosting income. Long-term transitional housing can assist in meeting that need, and we’ve developed a toolkit to help you implement this model in your own setting. As well, it’s important to remember everyone can progress, but they will not do so at the same rate nor in every area simultaneously.

Conclusion

This research supports implementation of an asset-based, relational case management plan for individuals and families facing poverty. The findings highlight the value of tailoring care to meet the unique needs of participants, emphasizing the importance of using what we call subsidiarity to meet root cause needs. The Padua Program is a successful example of its effectiveness and thus a worthy model from which to learn. Its detailed assessment tools and case management plan support positive, long-term self-sufficient outcomes.

Read the Study
Fighting Poverty One Family at a Time: Experimental Evidence from an Intervention with Holistic, Individualized, Wrap-Around Services | NBER

 

 

 

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