ESSAYS ON MARKET OUTCOMES AND RELIGIOSITY by NEIL R. MEREDITH (Under the Direction of DAVID B. MUSTARD) ABSTRACT In one subject area of economics, the economics of religion, a growing body of research explores the relationships between market and religious outcomes. The essays add to this research by investigating links between market outcomes and religiosity. In the first essay with David Mustard, we consider differential enrollment growth for religiously affiliated postsecondary institutions relative to private secular institutions in the United States from 1991-2005. We uncover evidence that enrollment growth in religiously affiliated institutions is higher for total, whites, blacks, Hispanics, and males than private secular institutions. We also address whether the religious intensity of an institution also affects enrollment gains. After controlling for other factors we find that intensely Protestant institutions are growing faster for total, blacks, Hispanics, and females relative to other Protestant institutions, which in turn are growing faster than their private secular counterparts. For the second essay, I revisit the relationship between labor income and religiosity to explore whether an omitted variable creates an endogeneity bias. I conduct robustness checks using wages in place of labor income. With the exception of the relationship between labor income and religiosity for men, I find that ordinary least squares of the relationship between labor income and religiosity and between wages and religiosity are reliable due to weak instrument problems. Panel estimation is also attempted for both genders. A lack of variation in frequency of attendance and frequency of prayer within individuals yields insignificant results. In the third essay, I use count data estimation to evaluate the relationship between unemployment and the frequency of religious service attendance and the relationship between being out of the labor force and the frequency of religious service attendance for individuals of working age. I also address the duration of unemployment and time spent out of the labor force. Results reveal that unemployment and the frequency of religious service attendance are uncorrelated. When out of the labor force, younger men, older men, and older women are predicted to attend less frequently. INDEX WORDS: labor, religion, education, unemployment, income ESSAYS ON MARKET OUTCOMES AND RELIGIOSITY by NEIL R. MEREDITH B.A., Indiana University of Pennsylvania, 2006 A Dissertation Submitted to the Graduate Faculty of The University of Georgia in Partial Fulfillment of the Requirements for the Degree DOCTOR OF PHILOSOPHY ATHENS, GEORGIA 2011 © 2011 NEIL R. MEREDITH All Rights Reserved ESSAYS ON MARKET OUTCOMES AND RELIGIOSITY by NEIL R. MEREDITH Major Professor: David B. Mustard Committee: Ronald S. Warren Christopher M. Cornwell Electronic Version Approved: Maureen Grasso Dean of the Graduate School The University of Georgia August 2011 DEDICATION To my beautiful bride Amy, I would not have made it through this without your love, respect, and encouragement. To my mentors Jim and Stephanie, the Drs. J., none of this would have been possible without the solid foundation, guidance, and encouragement you provided. To my friends, thank you for all of your support and encouragement. I could not have done this without you. iv ACKNOWLEDGEMENTS I would like to thank David Mustard for the time, guidance, and encouragement he has provided throughout my graduate studies and research. As members of my dissertation committee, I would also like to thank Ron Warren and Chris Cornwell for their time, patience, comments, and suggestions throughout the development of this dissertation. I would also like to thank my colleagues Chadi Abdallah and Tom McGahee who patiently listened to me and offered helpful suggestions as I developed my research ideas. I gratefully acknowledge faculty and students in the UGA Department of Economics who attended research seminars at which I presented earlier drafts of this work. Your suggestions and insightful comments improved the quality of this research. I am also grateful for comments I received from participants in the 2009 and 2011 Association for the Study of Religion, Economics, and Culture (ASREC) Conferences and participants in the American Christian Economist (ACE) sessions at the 2010 Allied Social Science Association (ASSA) Conference. v TABLE OF CONTENTS Page ACKNOWLEDGEMENTS .............................................................................................................v LIST OF TABLES ....................................................................................................................... viii LIST OF FIGURES ....................................................................................................................... xi CHAPTER 1 INTRODUCTION .........................................................................................................1 2 A POSTSECONDARY REVIVAL: THE IMPORTANCE OF RELIGIOSITY FOR POSTSECONDARY ENROLLMENT GROWTH .......................................................5 2.1 INTRODUCTION .............................................................................................5 2.2 HYPOTHESES ..................................................................................................6 2.3 DATA AND VARIABLE DEFINITIONS ......................................................12 2.4 ECONOMETRIC MODEL .............................................................................16 2.5 RESULTS ........................................................................................................18 2.6 CONCLUSIONS..............................................................................................23 3 LABOR INCOME AND RELIGIOSITY: EVIDENCE FROM SURVEY DATA ....36 3.1 INTRODUCTION ...........................................................................................36 3.2 DATA AND THEORY ....................................................................................38 3.3 ECONOMETRIC MODEL .............................................................................46 3.4 RESULTS ........................................................................................................52 3.5 CONCLUSIONS..............................................................................................58 vi 4 RELIGION AND LABOR: AN EXAMINATION OF RELIGIOUS SERVICE ATTENDANCE, UNEMPLOYMENT, AND LABOR FORCE STATUS USING COUNT DATA METHODS .......................................................................................73 4.1 INTRODUCTION ...........................................................................................73 4.2 THEORY .........................................................................................................76 4.3 DATA AND ECONOMETRIC MODEL ........................................................87 4.4 RESULTS ........................................................................................................96 4.5 CONCLUSIONS............................................................................................103 BIBLIOGRAPHY ........................................................................................................................126 APPENDICES A APPENDICES TO CHAPTER 3 ...............................................................................140 A.1 EXCLUSION OF OBSERVATIONS ..........................................................140 A.2 TREATMENT OF LABOR AND NON-LABOR INCOME .......................141 A.3 INSTRUMENTAL VARIABLES ................................................................143 B APPENDICES TO CHAPTER 4 ...............................................................................148 B.1 NATIONAL LONGITUDINAL SURVEY OF YOUTH 1979 COHORT ..148 B.2 HEALTH AND RETIREMENT STUDY.....................................................150 B.3 COUNT DATA ESTIMATION METHODS ...............................................153 vii LIST OF TABLES Page Table 2.1: Descriptive Statistics-Raw Data ...................................................................................27 Table 2.2: Descriptive Statistics-Whole Sample ...........................................................................28 Table 2.3: Descriptive Statistics-CCCU ........................................................................................29 Table 2.4: Total Enrollment Estimation Results ............................................................................30 Table 2.5: White Enrollment Estimation Results ..........................................................................31 Table 2.6: Black Enrollment Estimation Results ...........................................................................32 Table 2.7: Hispanic Enrollment Estimation Results ......................................................................33 Table 2.8: Male Enrollment Estimation Results ............................................................................34 Table 2.9: Female Enrollment Estimation Results ........................................................................35 Table 3.1: Descriptive Statistics for Weighted Pooled Cross Section Dataset ..............................60 Table 3.2: Descriptive Statistics for Weight Panel Dataset ...........................................................61 Table 3.3: First Stage Cross Section Results for Labor Income and Labor Income Squared ........62 Table 3.4: First Stage Cross Section Results for Wages and Wages