This paper documents the major features of Jewish economic history in the first millennium
to explain the distinctive occupational selection of the Jewish people into urban,
skilled occupations. We show that many Jews entered urban occupations in the eighth-ninth
centuries in the Muslim Empire when there were no restrictions on their economic
activities, most of them were farmers, and they were a minority in all locations.
Therefore, arguments based on restrictions or minority status cannot explain the
occupational transition of the Jews at that time. Our thesis is that the occupational
selection of the Jews was the outcome of the widespread literacy prompted by a religious
and educational reform in the first century ce, which was implemented in the third
to the eighth century. We present detailed information on the implementation of this
religious and educational reform in Judaism based on the Talmud, archeological evidence
on synagogues, the Cairo Geniza documents, and the Responsa literature. We also provide
evidence of the economic returns to Jewish religious literacy.