A Cost-Benefit Analysis of Being Jewish

Economist Carmel Chiswick looks at religion not as a spiritual practice but as a good, something that is bought. How much is it worth?

Don't think of it as a catering bill. Think of it as an investment in Jewish identity. (Carl Lender/Flickr)

When I drop my kids off at their Jewish day school, I’ll occasionally look around at many of the other dads dropping off their kids and notice a certain kind of distant stare on their faces; one can almost see the gears turning in their minds in a kind of wonderment as to what exactly it is we’re doing there. Even setting aside the massive costs of private-school tuition, for those of us who grew up attending Jewish day schools and didn’t have a great experience, we’re asking ourselves what it is that’s driving us to send our kids here; for those who grew up without that experience, there are worries about what their kids are missing out on and whether the experience might be too isolating.

Why we make the religious decisions we do is terrain familiar to scads of psychologists, sociologists, and clergy. It has only in recent decades come to scrutinized by economists.

Economists? What can economists tell us about religion? A lot, as it turns out.

A new book by George Washington University professor Carmel Chiswick, Judaism in Transition: How Economic Choices Shape Religious Tradition, is a pioneering work in this new area of study. Chiswick is a labor economist, and that turns out to be crucial here because of the field’s focus on scarcity, and especially the scarcity of time.

“Religion is a good,” Chiswick told me in an interview. While it's unconventional to think of religion that way, the transaction of exchanging time and money for a particular experience retains certain core qualities whether that experience is religious or secular. For example, though it might seem more wholesome than buying a boat, paying for religious schooling is still a purchase of a luxury good. Heading to church or synagogue might make one feel more righteous and community-oriented than going golfing on a weekend morning, and that’s pretty much the point: The feelings and knock-on effects gathered from spending time in a certain way are part of the overall purchase.

This idea of the “full cost,” in money plus time, of an item can present a very different perspective on many issues in the Jewish community. For example, probably the issue most talked about in the intersection of economics and Judaism is precisely that issue of the cost of Jewish education. At many prominent schools, tuition has grown at a rate well above that of inflation in recent decades, and left it simply unattainable for even many upper-middle-class families without some tuition assistance. It is routine to find schools charging in excess of $30,000 a year where I live, in Manhattan, and tuition in excess of $20,000 a year is common throughout the rest of the New York/New Jersey area. In Maryland, where Chiswick lives, tuition will almost always be more than $10,000 a year. When one realizes that sum often needs to be paid for multiple kids, and always out of post-tax dollars, it can suddenly stretch even an income of $200,000. Indeed, at a recent presentation I attended about a new tuition-assistance program, the sample families given as benefiting from the program were assumed to have pre-tax incomes ranging from $185,000 to $325,000, and between two and three kids attending the school.

But in the most detailed numeric breakdown of Chiswick’s book, she shows that the full cost of day school can be a much less significant expenditure than it is often made out to be. Because Jewish day schools can save parents quite a lot of time over lower-priced alternatives, they may be nearly breaking even when compared to other options, depending on the value of their time.

Labor economists suggest that the value we place on our time is directly correlated with our incomes. “A worker who is paid by the hour knows that leaving work on hour early—whether to sleep, to go shopping, or to drive a Hebrew-school carpool—involves a reduction in income exactly equal to the hourly wage rate,” Chiswick writes, and therefore, “a person’s potential hourly earnings thus provide a good first approximation of the value of an hour spent in any activity.” A lawyer who earns $200 an hour will view the time required to pick up and drop off their kid at different schools as quite expensive.

Chiswick shows how this view alters the equation when looking at the two major options for preparing a child for a Jewish life and a bar or bat mitzvah. Jewish day school is the full-time, dual-curriculum option available at Jewish private schools; by contrast, Hebrew school is the term used to describe a much more limited program of study, often on Sundays and a few weekdays as an after-school program at a local synagogue. Chiswick assumes that the several hours of extra time required to shuttle one’s child back and forth to Hebrew school instead of enrolling the child at a full-time day school can represent a time cost of $18,000 per year for our $200-an-hour lawyer. Suddenly, the combination of public school and Hebrew school rather than day school doesn’t seem like such a bargain.

Of course there's still a huge difference in cost between the two options. But the purchases aren't, in all likelihood, of two similar-quality goods: The Jewish education—and quite often the general-interest education, as well—is of much higher quality at a day school than the alternative. How do you decide what such things are worth? Chiswick notes that attitudes about money, life, and Jewish culture in America have changed over the generations, and that has consequences for day-school enrollment: “Our immigrant grandparents’ educational goal was to help their children realize the promise of America by moving up the socioeconomic ladder,” she writes. “Today’s Jewish parents take this for granted, worrying instead about how to enrich their children’s American lives by strengthening their Jewish heritage.”

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Day schools are but one, though perhaps the most concrete, example of how economics can inform an understanding of religious life. But Chiswick expands far beyond such a classic consumer decision (how much to spend on tuition) to matters of identity, including that question so central to American Jewry: What label does one choose to describe oneself as a Jew—Conservative, Reform, Orthodox, or something else?

While many of us see our religious identities as more philosophical or ideological matters, Chiswick suggests that they are also economic decisions: In the same way that the value of time could influence one's choice for schooling, it should also impact denominational choice. Orthodox Judaism generally requires the most hours of an adherent's time, while Reform Judaism generally requires quite a lot less of an adherent's time. Therefore, based on income alone (which makes a person's time more or less valuable), “we would expect the members of Orthodox congregations to have the lowest wage rates and the members of Reform congregations to have the highest wage rates,” with Conservative Jews somewhere in the middle. And since education correlates well to income, we’d expect college and advanced degrees to be similarly-sorted throughout the denominations. Sure enough, Chiswick writes, “This pattern was clearly apparent by the mid-20th century.”

Even though there’s the very obvious problem of interpreting that data to suggest that one caused the other, where only a correlation was found, many at the time “inferred that higher education undermined a person’s interest in religion” and thus that “Orthodoxy was an outdated mode of Judaism unsuited to a highly educated American community,” according to Chiswick. But more recent research has undermined this conclusion, suggesting that the old notion that more education yields less religious interest isn’t actually true.

As with the tuition anlaysis, Chiswick relies on an economic principle to shift the discussion; in this case, it's total income, which includes money derived from inheritance (“or the expectation of inheritance,” writes Chiswick), investments, and so forth. After several generations of economic success in America, many Jewish households might find themselves with firmly middle-class wages, but fully upper-middle-class lifestyles, thanks to these other sources of income. When taking that into account, Chiswick notes, “People with high nonlabor sources of income...may decide that they can afford to experience a more time-intensive Jewish lifestyle even if its full price is relatively high.” There’s also the fact that at a certain point, people stop deriving happiness from earning yet more money and look to other sources.

And that explains why today’s Jews have shaken up the patterns of a few decades ago: “If the association between income and synagogue affiliation characterized American Jews in the middle of the 20th century, today’s Jews with their high education and income levels should overwhelmingly affiliate with Reform synagogues,” Chiswick writes. “Yet this is not the case. By the end of the 20th century sociologists found little or no association between synagogue affiliations and educations or income level.”

In other words, based on those mid-20th century projections, and the Jewish community’s continuing climb up the income and wealth ladders in the United States, Jews today would be almost entirely Reform. And yet the Reform movement is shrinking, while Orthodoxy is growing, and other denominations, like the Renewal and Reconstructionist movements, are sprouting up and doing well, amid a great many Jews choosing from a range of less-traditional affiliations, such as declaring themselves “nondenominational” or “postdenominational.” In what would be confounding to mid-20th century Jewish sociologists if they were still alive, increases in incomes and education in the Jewish community have filtered into Orthodox and Conservative Judaism rather than drawing Jews away from these denominations to Reform Judaism, while the group of self-described "secular" Jews that actively avoids attaching any religious sensibility to their Jewish identity has shrunk.

These unexpected patterns are part of an answer to one of the most central questions for the Jewish community in America: How is a heavy investment in education changing how we act, especially with regard to the religious and communal activities we pursue?

As opposed to my immigrant grandparents who probably only ever received at most the equivalent of a high-school education, my parents both have at least one master’s degree, while among me and my sisters, two of us have bachelor's degrees and one has a Ph.D.—and all three of us were enrolled in dual-curriculum Jewish schools all the way through college. These multi-generational shifts in education change our desires and expectations for so much in life, it's safe to assume that they’d change our preferences in religious life too. By investing in our educations, we invested in what economists call “human capital.” And like other forms of capital, when you have a lot of it, you seek out ways to deploy it, and to do so in concert with economic principles, or, as Chiswick puts it, “Nonwork skills increase our efficiency and enjoyment of the many unpaid activities that make up the rest of our lives.”

What's most relevant here isn't just generic human capital but what Chiswick calls “Jewish human capital,” which we might gain by investing in going to Jewish schools and camps, learning Hebrew, reading Jewish texts, or attending Jewishly-relevant art exhibits or events, and even prayer services. The various ways to engage with the Jewish world assume differing degrees and types of investments in Jewish human capital: If you go to an Orthodox synagogue without knowing a fair amount of Hebrew, you’ll have a hard time following what’s going on; likewise, if you attend a Jewish literature discussion and haven’t read any Philip Roth or Isaac Bashevis Singer, you'll be quite lost as well. The attainment of this "Jewish human capital" has costs, but it enables people to enjoy and experience Jewish life more deeply. Said simply, those costs can sometimes pay off.

But standard, non-Jewish human capital is also shaping Jewish communities today. Surely, someone without a lot of Jewish schooling is unlikely to be able to pick up a Hebrew text at a class and start reading, but if that person nonetheless has studied literature, writing, history, and sociology, they’ll expect quite a lot more from community classes and events than mumbled prayers, trite fairy tales, and magical beliefs.

A non-economic examination of much of what the Jewish world has had to offer the non-Orthodox in recent decades reveals that it’s not simply a smaller ask on their time, but it’s quite often also a smaller ask on their minds: In young Jews today I see a desire for more distinct, engaging learning opportunities, not just quick-and-easy holiday celebrations. In the same way that highly-educated professionals expect to go to the opera and learn a thing or two, they’d expect their leisure activities in Jewish life to be similarly edifying.

A defining characteristic of American Jewish life is that Jewish human capital is something we have to choose to acquire; there are no Cossacks waiting in a nearby village keeping us confined to our Jewish world, and no communal governing bodies to tell us how we must be as Jews. The trajectory of the Jewish community is one that points to an ever-smaller grouping of those most willing to invest in their Jewish human capital, even at exorbitant costs. The lessons of Chiswick’s economic analysis can help us examine the value in providing worthwhile Jewish experiences for those who’d otherwise walk away.