Religious Festivals and Economic Development : Evidence from Catholic Saint Day Festivals in Mexico

Societies worldwide spend substantial resources celebrating religious festivals. How do festivals influence economic and social outcomes? We study Catholic patron saint day festivals in Mexico, exploiting two features of the setting: (i) municipal festival dates vary across the calendar and were determined in the early history of towns after Spanish conquest, and (ii) there is considerable variation in the intra-annual timing of agricultural seasons. We compare municipalities with "agriculturally-coinciding" festivals (those that coincide with peak planting or harvest months) to other municipalities, examining differences in long-run economic development and social outcomes. Agriculturally-coinciding festivals have negative effects on household income and other development outcomes. They also lead to lower agricultural productivity and higher share of the labor force in agriculture, consistent with agriculturally-coinciding festivals inhibiting the structural transformation of the economy. Agriculturally-coinciding festivals also lead to higher religiosity and social capital, potentially explaining why such festivals persist in spite of their negative growth consequences