Resisting Education (with Mark Koyama), Under review.
We study a setting in which the education system privileges some identities and marginalizes others. When the ideal identity prescribed by the education system evolves with the composition of the educated subpopulation, persistent educational inequality can emerge even when communities are ex ante identical in terms of productivity. We show that historically marginalized communities underinvest in education as a form of cultural resistance. Uniform growth in economic returns to education mitigates identity-based resistance to education. Uneven growth exacerbates it. In disadvantaged communities, rates of education may fall even as their economic returns to education rise. We show how a policymaker would intervene to minimize educational inequality, maximize rates of education and assimilate a minority community. Without appropriate economic incentives for education, cultural measures aimed at assimilation can backfire. We illustrate the insights and policy implications of our analysis through a series of examples.
Elite Identity and Political Accountability: A Tale of Ten Islands (with Christian Dippel), NBER working paper 22777.
This paper examines the relationship between elite identity and political outcomes from a theoretical and empirical perspective. Elite members with distinct economic and social identities vote for or against an extractive policy, which benefits them at the expense of the citizenry. Voting is disciplined by the threat of citizen revolt, with some elite members being more accountable than others. The relationship between elite identity and political accountability is complex and non-monotonic. As their share in the elite grows, accountable elite members are more likely to vote for extractive policies. When the elite becomes too accountable as a whole, elite members may pursue extractive policies by altering the institutional framework. The model is grounded in an empirical exploration of ten British Caribbean sugar colonies where the emancipation of slaves in 1838 created a mixed local and British elite and for which we have unique data on elite composition and voting. Voting behavior depends on an individual’s identity and the overall composition of the elite in a manner predicted by the theory. In all but one of the islands elites eventually dissolved their legislative assemblies, ceding their formal powers to the British Crown.
Consistent with the theory, we find evidence linking this to rising accountability of the islands’ elites.
Advances in the Economics of Religion, co-edited with Sriya Iyer and Jared Rubin, Palgrave Macmillan, summer 2018.
Coordination and Culture. Economic Theory, forthcoming.
Culture constrains individual choice, rendering certain actions impermissible or taboo. While cultural constraints may regulate behavior within a group, they can have a pernicious effect in multicultural societies, inhibiting the emergence of unified social conventions. We analyze interactions between members of two cultural groups who are matched to play a coordination game with an arbitrary number of actions. Due to cultural constraints, miscoordination prevails despite strong incentives to coordinate behavior. In an application to identity-based conflict, exclusive ethnic and religious identities persist in poorer and more unequal societies. Occasional violation of cultural constraints can make miscoordination even more stable.
Education, Social Mobility and Religious Movements: The Islamic Revival in Egypt (with Christine Binzel). The Economic Journal, forthcoming.
Muslim societies have been reshaped in recent decades by an Islamic revival. This paper focuses on Egypt—the epicenter of the movement in the Arab world. We document a contemporaneous decline in social mobility among educated youth. We then develop a model to show how an unexpected decline in social mobility combined with inequality can produce a religious revival, led by the educated middle class. The principal idea is that religion helps individuals to cope with unfulfilled aspirations by adjusting their expectations-based reference point. By raising aspirations, economic development may make societies more not less prone to religious revivals.
Sacrifice and Sorting in Clubs. Forum for Social Economics (special issue on The Economics of Religion), forthcoming.
In club models of religion, sacrifices demanded by religious groups promote efficient production of club goods by screening out free riders. An alternative, complementary view is that religious clubs provide a means of sorting, matching individuals with similar characteristics. Sorting differs from screening in that it operates on traits that do not directly affect club goods production. This paper explores the role of sacrifice in sorting among religious clubs when individuals prefer to interact with their own type. Despite this own-type bias, the usual free-rider problem in club goods production can inhibit sorting among groups. Prohibitions and demands for stigmatizing behavior can solve this problem. Costly sacrifices are demanded, not by groups catering to the majority, but by those attracting rare/exotic types. The rarer the type, the more costly the sacrifice required to achieve sorting.
Education, Identity, and Community: Lessons from Jewish Emancipation (with Mark Koyama and Michael Sacks), Public Choice, 2017, 171(1), 119–143.
Why do some minority communities take up opportunities for education while others reject them? To shed light on this, we study the impact of Jewish Emancipation in 19th century Europe on investment in human capital. In Germany, non-religious and Reform Jews dramatically increased secular education. In the less developed parts of Eastern Europe, Orthodox and ultra-Orthodox communities imposed unprecedented restrictions on secular education and isolated themselves from society. Explaining this bifurcation requires a model of education that is different from the standard human capital model. In our model, education not only confers economic benefits but also transmits values that undermine the cultural identity of minority groups. We show that it is individually rational for agents who benefit least from rising returns to education to respond by reducing their investment in education. Community-level sanctions for high levels of education piggyback upon this effect and amplify it.
Jewish Emancipation and Schism: Economic Development and Religious Change (with Mark Koyama) Journal of Comparative Economics, 2016, 44(3), 562-584.
This paper studies the impact of Jewish Emancipation and economic development on Jewish religious culture in 19th century Europe. In Germany, a liberal Reform movement developed in response to emancipation, while ultra-Orthodox Judaism emerged in eastern Europe. We develop an historical narrative and model of religious organization that accounts for the polarized responses by Jewish communities. Our explanation is based on a tradeoff between time and money contributions. A religious organization chooses between a relatively affluent community that expends little effort on religious participation and a poorer community that devotes a large amount of time and effort to religious activity. Political and economic development shape this tradeoff in unexpected ways, leading to complex forms of behavior such as religious schisms and cycles. When preferences are transmitted intergenerationally, organizations tend to be more conservative. Our historical narrative points to further extensions of extant models of religion, as well as providing broader insights into cultural integration and religious change.
Identity-Based Organizations. American Economic Review: Papers and Proceedings, 2016, 106(5), 410–414.
A single club model describes the collective production of both personal and social identity. Personal identity, how one perceives oneself, is formed through a process of cultural transmission. Social identity, how one is perceived by others, takes the form of collective reputation. Our model of identity-based organizations incorporates into the economics of identity insights from the economics of religion and cultural transmission. The identities that develop tend to be oppositional. Organizations devoted to more extreme identities are able to support higher levels of participation and collective action.
Veiling Quarterly Journal of Economics, 2013, 128(1), 337-370.
Veiling among Muslim women is modeled as a commitment mechanism that limits temptation to deviate from religious norms of behavior. Our analysis suggests that veiling is a strategy for integration, enabling women to take up outside economic opportunities while preserving their reputation within the community. This accounts for puzzling features of the new veiling movement since the 1970s. Veiling also has surprising effects on the intergenerational transmission of values. Compulsory veiling laws can lead to a decline in religiosity. Bans on veiling can inhibit social integration and increase religiosity.
Instincts and Institutions: The Rise of the Market (with Mark Koyama) in William N. Butos (ed.), Advances in Austrian Economics, 2010, 13, 285-309.
Outstanding Author Contribution Award, Emerald Literati Network
How did cooperation emerge in large-scale, fluid societies? Standard theories based on direct and indirect reciprocity between self-regarding agents cannot explain the high level of impersonal exchange observed in developed market economies. Drawing upon recent research from across the behavioural sciences, we attribute the emergence of cooperation in early trade to an evolved characteristic of human psychology which makes revenge sweet: people are willing to pay a price to punish those who betray their trust. Once cooperative expectations became fixed, institutions such as the law merchant and ethnic trading networks, as well as certain ‘bourgeois virtues,’ helped sustain and extend trade during the Medieval period. Our argument continues the tradition begun by F.A. Hayek in The Sensory Order (1952) by providing an integrated explanation for the rise of the market based upon the coevolution of human psychology, culture and institutions. In our conclusion we revisit Hayek’s (Hayek 1976, 1978, 1988) analysis of the conflict between our instincts and the institutions that have created the market order.
An Interview with Thomas Schelling, Oxonomics 2(1-2), 2007, p. 1-8.