June 2008
Nineteenth-Century Catholic doctrine strongly opposed state schooling. We show that countries with larger shares of Catholics in 1900 (but without a Catholic state religion) tend to have larger shares of privately operated schools even today. We use this historical pattern as a natural experiment to estimate the causal effect of contemporary private competition on student achievement in cross-country student-level analyses. Our results show that larger shares of privately operated schools lead to better student achievement in mathematics, science, and reading and to lower total education spending, even after controlling for current Catholic shares.
Keywords: private school competition, student achievement, Catholic schools
JEL Classification: [I200] Education and Research Institutions : General [L330] Comparison of Public and Private Enterprises; Privatization; Contracting Out [N300] Economic History : Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, and Religion : General, International, or Comparative [Z120] Cultural Economics : Religion
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Martin R. West martin_west@gse.harvard.edu Ludger Woessmann woessmann@ifo.de
