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Sectarian Competition and the Market Provision of Human Capital

Published online by Cambridge University Press:  09 January 2023

Heyu Xiong  and
Yiling Zhao
Heyu Xiong
Affiliation:
Assistant Professor, Department of Economics, Case Western Reserve University.10900 Euclid Ave, Cleveland, OH 44106 E-mail: hxx226@case.edu.
Yiling Zhao*
Affiliation:
Assistant Professor, School of Economics, Peking University. No. 5 Yiheyuan Rd., Beijing, China 100871
*
E-mail: yilzhao@pku.edu.cn.
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Abstract

We study the role of denominational competition in the expansion of higher education in the nineteenth-century United States. We document that nearly all colleges established in this period were affiliated with a Christian denomination. Empirical analysis reveals a robust positive relationship between the denominational fragmentation of the county and the number of colleges established. We take several steps to rule out competing explanations and also highlight the causal channel by utilizing two historical case studies. We conclude by estimating a model of school choice and showing that students exhibited strong preferences to attend same-denominational colleges in terms of willingness-to-pay and willingness-to-travel. Therefore, we argue that religious diversity softened the extent of tuition competition between institutions and precipitated an “excess” entry of schools.

Type
Article
Information
The Journal of Economic History , Volume 83 , Issue 1 , March 2023 , pp. 1 - 44
Copyright
© The Author(s), 2023. Published by Cambridge University Press on behalf of the Economic History Association

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Footnotes

We thank the coeditor, Eric Hilt, and two anonymous referees for their valuable comments. We thank Joel Mokyr, Carola Frydman, Nancy Qian, Joseph Ferrie, Louis Cain, Jeremiah Dittmar, Arthi Vellore, and Se Yan for their thoughts and comments on this work. This paper benefited from seminar participants at the Economic History Association, NBER Summer Institute, ASREC, H2D2, Northwestern University, Oberlin College, and Capital University of Economics and Business. We thank Ashish Agarwal for his research assistance. All remaining errors are our own. The authors are grateful for financial support from the Balzan Foundation and Northwestern’s Center for Economic History.

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