What percentage of Jews were in "finance" (money-lenders) throughout Middle Ages?

The question is leading, so I will address a few parts separately and I apologize for the length:

The Middle Ages is the period from 400-1400 AD. The occupation choices of Jews changed dramatically during this 1,000 year period, especially around the 7th century. The question also asks about the time period from 1300-1700 AD. During 1300-1700, only 5-10% of European Jews were farmers, the main occupation of the time period. It's not clear exactly how many European Jews were engaged in finance, but over 50% is possible. A higher percent seems economically impossible, even if all occupation choices were closed except finance as became the case by 1700, since Jews were restricted to ghettos and had separate micro-economies. They had separate schools, religious leaders, scholars, doctors, merchants, and food service providers.

Almost all Jews were farmers in the first half of the first millennium, whereas at the end of the first millennium a small proportion of them remained in agriculture and the greatest majority became craftsmen, artisans, merchants, doctors, and moneylenders. A shift is also seen away from craftsmen, merchants and artisans towards a greater proportion of money-lenders over time. I will propose a few reasons for this.

The negative stereotype of Jews in finance is that they are tight-fisted or greedy. Shylock is after his "pound of flesh." Usury was forbidden to Christians, so people of the era viewed the occupation as sinful and evil due to their religion. There are dozens of instances of Jewish laws regulating ethical financial behavior.

The Wikipedia article states the theory that Jews chose the occupation of finance and money-lending due to restrictions in other occupations. This is likely only partially correct. Oliver Cromwell introduced the first blanket occupational restrictions on Jews anywhere in Europe in the 17th century, but Jews were well-established in finance by this time. The restrictions were a political move to convince Parliament to allow Jews to re-enter the country after their expulsion in the 13th century, since he was seeking help from Jewish bankers. It was common for them to be excluded from guilds, so they might not be able to be craftsmen or artisans. The Jewish Virtual Library says that Christians often complained that Jews were overly aggressive and did not follow the business etiquette of the times, so their business practices were sometimes regulated or they might be banned from some areas of business entirely.

Another widely accepted theory for the large numbers of Jews in finance is a change in religious education that increased literacy rates during the Talmudic era. According to this theory, Jews changed from a primarily agricultural people to primarily urban people engaged in trade, finance, commerce and medicine at roughly the same time, around 7th century, in different areas throughout the world, despite varied treatment in occupation restrictions. It is also shown that Jews that remained farmers tended to convert to Islam or Christianity at much higher rates than urban Jews, while effective laws were passed to prevent conversion of Christians to Jews starting in the 5th century.

According to Botticini and Eckstein: "The transition away from agriculture into crafts, trade, and moneylending started in the Talmudic period, especially in Babylon. The Babylonian Talmud (redacted in about 500 CE) has many more debates and rulings regarding crafts and trade than the Talmud of the Land of Israel. In the fifth—sixth centuries the Jews abandoning agriculture moved to the towns and became small shopkeepers and artisans in the tanning, linen, silk, dyeing industries, and glassware making" In Babylon, its known that two banks were established by Jews as well. So also during the Talmudic Period, finance was an established occupation but small. Finance was well-established as a Jewish profession by 1170 as documented by the travels of Benjamin of Tudela and the laws of Talmud.

Persecution of the Jews worsened over time, so it reasons that laws restricting occupations for instance became more frequent and more restrictive with effects on occupational choices. At the beginning of the Middle Ages, the Jews were viewed as the "Chosen People" by Christians, so although popular sentiment was often against them, Catholic Church leaders protected their rights. The Crusades hardened attitudes and the establishment of universities in the 13th century led to Christian scholars examining Jewish holy texts. Church leaders decided the Talmud was a heresy within their purview to regulate. This turbulent time period of persecution coincides with the rise of powerful European financial centers, such as Venice in the 14th century, through the work of Jewish bankers.

The Jewish Emancipation started in the late 18th century and ended in the late 20th century. Although Jews are still over-represented in the field of finance, it is not as pronounced as it once was.

References:

William Shakespeare. The Merchant of Venice.

Jewish ghettos in Europe. Wikipedia

Economic Antisemitism. Wikipedia

Venice: Wall Street of the Middle Ages

Middle Ages. Wikipedia

Banking and Bankers. Jewish Virtual Library

Church and the Jews in the Middle Ages. Catholic Culture.org

Jewish Emancipation. Wikipedia

Maristella Botticini and Zvi Eckstein. Jewish Occupational Selection: Education, Restrictions, or Minorities?

Resettlement of the Jews in England. Wikipedia

Maristella Botticini and Zvi Eckstein. From Farmers to Merchants:A Human Capital Interpretation of Jewish Economic History

Jews, like any other ethnic minority, lived in separate quarters (ghettos) in cities. Such a community would have a normal economy: shops, tailors, other artisans; mostly serving the community itself. Most people in the community would have little contact with the outsiders, the exception being the traders who "imported" raw materials (e.g., grain and livestock) and "exported" whatever the community produced (e.g., jewelry). These people tended to have a larger cash flow and thus could double as money lenders - and did so because this occupation was forbidden to their Christian neighbors.

Now, the only Jews most Christians interacted with were the traders/money lenders, so this created the stereotype that all Jews are money lenders.

So, to answer the question, only a small minority of Jews were involved in money lending.

One can actually see that mathematically. The number of money lenders that an economy needs is determined by the demand for credit, which depends on the size of the (surrounding!) economy - the money flow, production rates, stability &c &c. Thus it should be determined (roughly) by the number of non-Jewish customers, not by the number of Jews.

Take a look at statistics: in Nuremberg, in 1338 there are 212 adult Jews for 20k Christians; in Paris, in 1296-97 - 82 Jewish families for 100+k of Christians. To use a very rough estimate: if all 80 Jews in Paris were moneylenders, then 1 moneylender can serve 1000+ customers, which means that 90% of Nuremberg Jews are out of money-lending jobs.

See http://www.jewishencyclopedia.com/articles/11652-occupations for more information.

The number of Jews who lent money in the Middle Ages is unfortunately commonly over-estimated. The majority of Jews had jobs that did not involve money-lending. This is a fairly new historical discovery, though more and more research is coming out every year. For a good, scholarly, and responsible introduction see:

Margolis, Ethan Levi, "Evidence that the Majority of Medieval English Jews were not Moneylenders, with an Emphasis on Document E. 101/249/4", MA thesis submitted to North Carolina State University, 2015.

Also, a common error evinced in many of these answers is that money-lending was forbidden to Christians. This was only the case after the Third Lateran Council. Before this, it was very common. The below are excerpts from Margolis (p. 103):

"Lending to the crown in the middle of the twelfth century was dominated by Christian financiers. William Cade is the most well-known of these, but he was just one of many Christians lending money to the king. William Trentegeruns, Gervase of Cornhill,Robert fitz Sawin, and Ralf Waspail, all show up on the pipe rolls receiving payments for loans to the king over significant amounts of time... For a detailed account of Cade’s activities, vide Hilary Jenkinson, “William Cade, a Financier of the Twelfth Century,” The English Historical Review 28, no. 110 (1913): 209-227... Evidence of Waspail's lending first shows up in the pipe roll for 1158; Joseph Hunter, ed., The Great Rolls of the Pipe for the Second, Third, and Fourth Years of the Reign of King Henry II (London:George E. Eyre & Andrew Spottiswoode, 1844), 120-83, passim. He most likely stopped his lending around the time of his last entry in 1163. The Pipe Roll Society, The Great Roll of the Pipe for the Ninth Year of the Reign of King Henry II (London: Wyman & Sons, 1886), 25."