Managing the Faithful: The Internal Labor Market of the Roman Catholic Church

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Although economists in recent years have begun to apply economic theory to the activities of religious organizations, very few have ventured deeply into the realm of the Roman Catholic Church and almost none have considered the confluence between Internal Labor Market Theory and the promotional job ladder for ordained Catholic clergyman. This analysis explores the implications of the Catholic Church’s internal promotional ladder on its level of theological flexibility and hence its ability to adjust to changing market conditions. Specifically, by treating the Catholic Church as an organization subject to many of the same market forces as ordinary business firms, the research presented in this analysis shows how much of the “crisis” the church is confronting in the modern era—such as the rapid decline in the number of priests—can be explained by microeconomic structures that have developed over the past two millennia. At the broadest level, this analysis offers a new paradigm for viewing resistance to change in the church and provides a model for understanding the long-term implications of inflexibility on the viability of the church as an institution.