This paper investigates the effect of coexistence of different religious groups.
Using a unique data set at both the district and the village level, I estimate the
impact of the former Armenian presence in Turkey. Using walking distance to Mt.
Ararat, which was the geographical center of the ancient Armenian kingdoms, as
an instrument for the spatial distribution of Armenians in 1914, I find that the
current residents of districts with a greater historical Armenian presence are more
religious, less educated, and poorer. I propose a mechanism and test for it: the
presence of a rival religious group in close proximity increased the identification
of Muslims with their in-group identity, Islam, and pious Muslims demanded
education less after the secularization of education in the 1920s. Consistent with
this mechanism, I find that the current residents of Muslim villages that are closer
to former Armenian villages support Islamist parties more, and that the historical
Armenian presence has a negative impact on education only for the cohorts that
are affected by the secularization reform. Taken together, the results show that
coexistence of different religious groups can have a long-term impact through its
effect on culture and its interaction with formal institutions. When faced with a
trade-off between transmitting their religious cultural traits to their offspring and
educating them within the secular education system, Muslims who became more
attached to their religion as a result of their coexistence with a rival non-Muslim
group opted out of secular education.