Do Laws Against Muslim Veils Actually Increase Religiosity?

Recent research from Oxford indicates that it does and I believe it:

Veiling among Muslim women is modelled as a form of cultural resistance which inhibits the transmission of secular values. Individuals care about opinions of their community members and use veiling to influence these opinions. Our theory predicts that veiling is highest when individuals from highly religious communities interact in highly secular environments. This accounts for puzzling features of the new veiling movement since the 1970s. Though veiling helps retain religious values, we show that bans on veiling aimed at assimilation can be counterproductive. By inducing religious types to segregate in local communities, bans on veiling can lead to increased religiosity.

Source: "Veiling" from Department of Economics, University of Oxford, Number 491, June 2010

The economic rationale behind this is that outlawing veils undiversified the accumulation of social capital of Muslim women and raises the social cost of wearing the veil.  As the social costs increase, it requires greater religious commitment to wear the veil.  As the cost of belonging to a religious group rises, free-riders in the group tend to drop out which also increases the average commitment level of group members.  As the average commitment level increases, the value of belonging to the group also rises.  Paradoxically, increasing the cost of the religion also increases the value of belonging to it.  This is the economic rationale for why persecuted religions often tend to grow.

For some pioneering work on this, read Sacrifice and Stigma [PDF] by one of my mentors, Larry Iannoccone.  Listen to a podcast where he talks about the economics of religion with Russ Roberts.

Read more of my posts on the economics of religion here.