The Long Shadow of Jewish Persecution on Financial Decisions

For centuries, Jews have been associated with financial services. We find that present-day households in German counties where Jewish persecution was higher in the Middle Ages and the Nazi period invest less in stocks, have lower savings in bank deposits, and are less likely to get a mortgage, but not to own a house. The forced migrations of the Ashkenazi communities across the German lands after the 11th century help assess the extent to which the e ffect of Jewish persecution on present-day financial decisions is causal. We document direct evidence from the field consistent with a persistent norm of distrust in finance, transmitted across generations, driving the eff ects. Instead, indirect evidence is inconsistent with current antisemitism, generalized trust, or supply-side forces explaining our results.