| Abstract: |
Public schooling systems are an essential feature of modern states. These
systems often developed at the expense of religious schools, which undertook
the bulk of education historically and still cater to large student
populations worldwide. This paper examines how Indonesia’s long-standing
Islamic school system responded to the construction of 61,000 public
elementary schools in the mid-1970s. The policy was designed in part to foster
nation building and to curb religious influence in society. We are the first
to study the market response to these ideological objectives. Using novel data
on Islamic school construction and curriculum, we identify both short-run
effects on exposed cohorts as well as dynamic, long-run effects on education
markets. While primary enrollment shifted towards state schools, religious
education increased on net as Islamic secondary schools absorbed the increased
demand for continued education. The Islamic sector not only entered new
markets to compete with the state but also increased religious curriculum at
newly created schools. Our results suggest that the Islamic sector response
increased religiosity at the expense of a secular national identity. Overall,
this ideological competition in education undermined the nation-building
impacts of mass schooling. |