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The Role of Human Capital and Innovation in Prussian Economic Development

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  • Francesco Cinnirella

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  • Jochen Streb

Abstract

By merging individual data on valuable patents granted in Prussia in the late nineteenth century with county level information on literacy and income tax revenues we show that increases in the stock of human capital not only improved workers’ productivity but also accelerated innovative activities which, in turn, evoked an additional rise in the productivity level. Instrumenting the stock of literate people with information on the number of blind and deaf-mute people we also establish the direct causal effect of human capital on income, net of the innovation channel.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 4391.

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Date of creation: 2013
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Handle: RePEc:ces:ceswps:_4391

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Keywords: human capital; growth; literacy; innovation; patents; Prussia;

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  1. Schultz, Theodore W, 1975. "The Value of the Ability to Deal with Disequilibria," Journal of Economic Literature, American Economic Association, vol. 13(3), pages 827-46, September.
  2. Richter, Ralf & Streb, Jochen, 2009. "Catching-up and falling behind: knowledge spillover from American to German machine tool makers," FZID Discussion Papers 09-2009, University of Hohenheim, Center for Research on Innovation and Services (FZID).
  3. Jochen Streb & J�Rg Baten & Shuxi Yin, 2006. "Technological and geographical knowledge spillover in the German empire 1877-1918," Economic History Review, Economic History Society, vol. 59(2), pages 347-373, 05.
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  5. Benhabib, Jess & Spiegel, Mark M., 1994. "The role of human capital in economic development evidence from aggregate cross-country data," Journal of Monetary Economics, Elsevier, vol. 34(2), pages 143-173, October.
  6. Kenneth L. Sokoloff, 1988. "Inventive Activity in Early Industrial America: Evidence From Patent Records, 1790-1846," UCLA Economics Working Papers 499, UCLA Department of Economics.
  7. Petra Moser, 2013. "Patents and Innovation: Evidence from Economic History," Journal of Economic Perspectives, American Economic Association, vol. 27(1), pages 23-44, Winter.
  8. Peter J. Klenow & Mark Bils, 2000. "Does Schooling Cause Growth?," American Economic Review, American Economic Association, vol. 90(5), pages 1160-1183, December.
  9. Zvi Griliches, 1990. "Patent Statistics as Economic Indicators: A Survey," NBER Working Papers 3301, National Bureau of Economic Research, Inc.
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  12. Crayen, Dorothee & Baten, Joerg, 2010. "Global trends in numeracy 1820-1949 and its implications for long-term growth," Explorations in Economic History, Elsevier, vol. 47(1), pages 82-99, January.
  13. Thomas Barnebeck Andersen & Carl-Johan Dalgaard & Pablo Selaya, 2011. "Eye Disease and Development," Discussion Papers 11-22, University of Copenhagen. Department of Economics.
  14. Becker, Sascha & Cinnirella, Francesco & Hornung, Eric & Woessmann, Ludger, 2012. "iPEHD - The ifo Prussian Economic History Database," CAGE Online Working Paper Series 96, Competitive Advantage in the Global Economy (CAGE).
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  16. Kirsten Labuske & Jochen Streb, 2008. "Technological Creativity and Cheap Labour? Explaining the Growing International Competitiveness of German Mechanical Engineering before World War I," German Economic Review, Verein für Socialpolitik, vol. 9, pages 65-86, 02.
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  19. repec:fth:harver:1473 is not listed on IDEAS
  20. Francesco Cinnirella & Erik Hornung, 2011. "Landownership Concentration and the Expansion of Education," CESifo Working Paper Series 3603, CESifo Group Munich.
  21. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
  22. Jacob Mincer, 1958. "Investment in Human Capital and Personal Income Distribution," Journal of Political Economy, University of Chicago Press, vol. 66, pages 281.
  23. Moser, Petra, 2011. "Do Patents Weaken the Localization of Innovations? Evidence from World's Fairs," The Journal of Economic History, Cambridge University Press, vol. 71(02), pages 363-382, June.
  24. Streb, Jochen & Wallusch, Jacek & Yin, Shuxi, 2007. "Knowledge spill-over from new to old industries: The case of German synthetic dyes and textiles (1878-1913)," Explorations in Economic History, Elsevier, vol. 44(2), pages 203-223, April.
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