Indiana is home to about 1 in 6 of all Amish Americans, with estimates from 2022 at about 62,000 adherents. The Amish, as most readers will know, are a Christian religious denomination who arrived from Germany and Switzerland in the early 1800s. Their members are recognizable by their style of dress and transportation.
Again, most folks know this, but newcomers to Indiana may not. Amish men and women can be seen wearing work clothes of simple designs — black trousers and jacket for men, simple dresses for women. They are recognizable traveling by bicycle or horse-drawn carriage.
Amish farms and families have a quaint, 19th-century look about them. This is purposeful, with an intention to preserve a way of life that is focused on spiritual observance. In many ways, this is not remarkable — we have many religious groups who wish to sustain their identity in an America awash with options. We often forget how new our modern conveniences truly are, and that a sizable share of Americans lived like the Amish less than a century ago. While many people find much about their lifestyle to be endlessly fascinating, to an economist, the Amish are simply part of an ever-changing tapestry of the United States.
The Amish live so separately that their presence is worth noting in the ways they affect the economy. This influence on primarily the local economy is driven by the focus on the community and household being ‘self-sufficient.’ This self-sufficiency often means that households will establish themselves on subsistence-size farms, which is less than 50 acres. Because the Amish largely forbid modern agricultural machinery, most of their farms rely on animal power. This limits the scale of farming to about the size of a family farm in the late 19th century.
One result of the proliferation of these small farms, is that after a couple of generations of nature taking its course, the population outgrows the available farms and neighborhood, which is an inevitable economic consequence of clinging to technologies and practices of the 19th century. This has two notable effects that are reminiscent of much of the Midwest just before the turn of the 20th century.
The first of these effects is the diaspora. As they were crowded out of small farms, Amish families moved westward and southward across the country. Here in Indiana, Amish communities have migrated from Pennsylvania to Wayne and Parke counties over the last three decades. Meanwhile, productivity growth in agriculture increasingly makes part of America’s farmland redundant. This dynamic allows the Amish to re-establish family farms in places where they have not been economically viable for generations.
The second big trend is the movement of the Amish into non-agricultural occupations. Today, a substantial share of Amish men and women work in manufacturing, construction, food services and retail. This shift is a direct corollary to what occurred in the late 19th century as Midwestern family farms started to feel the effects of growing populations and better technology. Some of today’s Amish families might be able to survive on a small farm, but they increasingly rely on supplemental work elsewhere. You can farm like it is 1900 if you wish, but the produce you sell will face 2022 prices. That limits what can be profitably grown on a family farm.
The Amish pay most taxes, including income, sales and property taxes, and in return they receive most government benefits, including a judicial system, national defense, police and fire protection and other public services. They also receive public goods as they choose, such as roads. The Amish are pacifists and do not serve in the armed forces. Likewise, they do not participate in Social Security, so they do not pay FICA payroll taxes.
The Amish typically do not attend public schools; they attend schools operated by their local community, ending their formal education after eighth grade. Additionally, the Amish typically don’t participate in poverty relief programs or Medicaid. There are exceptions to many of these cases, determined by local bishops, ministers and deacons. There are regional variations in the rules of each community. For example, someone with a close eye might notice some buggies are equipped with safety reflectors, while buggies in another county are not.
With very few Amish attending high school or college, the educational attainment data in counties with large Amish populations are poor measures of human capital. LaGrange County is a good example. A whopping 40 percent of adults are listed as having not completed high school. The Amish population in the county is 44 percent, so one can assume that nearly every non-Amish resident has completed high school. Given the Amish focus on the ability to read the Bible, LaGrange County might possess the highest literacy rate in the United States.
It is hard not to draw similarities between the Amish and newer immigrant groups. The literacy example is perfect for this comparison. Many immigrants to the USA, particularly illegal immigrants or refugees, have poorly measured human capital. A typical Guatemalan immigrant to the USA will not have attended high school. For good reason, that credential is a critical measure of cognitive ability and motivation among native-born Americans. Among immigrant groups, that is not the case.
Lack of universal secondary education means many intelligent adults do not possess that credential. So, measures of formal schooling loses its ability to measure cognitive ability. As for motivation, that walk from Guatemala to Texas speaks for itself. It is unsurprising that the Amish work alongside immigrants in many businesses around Indiana. Individuals from both groups often lack formal credentials that attest to human capital.
The other striking comparison of the Amish to immigrants is the difference in assimilation. Today’s immigrants typically assimilate quickly. Children are given ‘Americanized’ names and English language typically supplants Spanish, Arabic or Hindi, in a single generation. While religion is more persistent, children or grandchildren are far more likely to marry outside of their ethnicity and religion.
The Amish have clung to a 19th century lifestyle for more than 150 years. There are other religious minorities who cling to a very separate lifestyle. The Mennonites, Hutterites and Hasidim come to mind. But no immigrant group in our history remained as non-assimilated as the Amish. Yet, the effect of this unassimilated population is modest. There’s an interesting lesson in that.
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