Does Education Increase Interethnic and Interreligious Tolerance? Evidence from a Natural Experiment

Can the government increase tolerance among its citizens by providing them with more schooling? We exploit a large school building program from Indonesia to examine the causal relationship between education and attitudes towards people from a different ethnicity and religion. Our generalized difference-in-differences estimates suggest that receiving more education causes an increase in interethnic and interreligious tolerance. Specifically, a one standard d eviation increase in education results in a .4 standard deviation increase in tolerance. We demonstrate robustness of results and show that the common trend assumption is satisfied. Subsequently, we shed light light on several mechanisms: first, treated individuals are more likely to migrate, to live in cities and to work in occupations outside of agriculture. This in turn, increases their incomes and the religious and economic diversity of their social environment. Second, we employ an additional identification strategy to show that the educational content under Suharto emphasizing the national unity of Indonesia is an important mechanism underlying the estimated treatment effects.