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What Accounts for the US Ascendancy to Economic Superpower by the Early 20th Century: The Morrill Act – Human Capital Hypothesis

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  • Ehrlich, Isaac

    () (University at Buffalo, SUNY)

  • Cook, Adam

    () (State University of New York)

  • Yin, Yong

    () (University at Buffalo, SUNY)

Abstract

Maddison's international panel data show that technically it was the faster growth rate of the US economy that led to its overtaking the UK as economic superpower. We explore the contributing factors. Identifying the land-grant colleges system triggered by the 1862/1890 Morrill Acts (MAs) as a major contributor, we develop this hypothesis theoretically and test it via difference-in-differences regression analyses viewing the MAs as the experiment, the US or US states as treatment groups, and the UK as chief control group in the country-level comparisons. Using national and state-level data, we estimate that the MAs produced sizeable educational and economic returns which catapulted the US into its leading status.

Suggested Citation

  • Ehrlich, Isaac & Cook, Adam & Yin, Yong, 2018. "What Accounts for the US Ascendancy to Economic Superpower by the Early 20th Century: The Morrill Act – Human Capital Hypothesis," IZA Discussion Papers 11647, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp11647
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    References listed on IDEAS

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    1. Isaac Ehrlich & Dunli Li & Zhiqiang Liu, 2017. "The Role of Entrepreneurial Human Capital as a Driver of Endogenous Economic Growth," Journal of Human Capital, University of Chicago Press, vol. 11(3), pages 310-351.
    2. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 407-443.
    3. Chad Turner & Robert Tamura & Sean Mulholland & Scott Baier, 2007. "Education and income of the states of the United States: 1840–2000," Journal of Economic Growth, Springer, vol. 12(2), pages 101-158, June.
    4. Ehrlich, Isaac & Georges Gallais-Hamonno & Zhiqiang Liu & Randall Lutter, 1994. "Productivity Growth and Firm Ownership: An Analytical and Empirical Investigation," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 1006-1038, October.
    5. Jutta Bolt & Jan Luiten Zanden, 2014. "The Maddison Project: collaborative research on historical national accounts," Economic History Review, Economic History Society, vol. 67(3), pages 627-651, August.
    6. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, Oxford University Press, vol. 119(1), pages 249-275.
    7. Jushan Bai & Pierre Perron, 2003. "Computation and analysis of multiple structural change models," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 18(1), pages 1-22.
    8. Fogel, Robert William, 1962. "A Quantitative Approach to the Study of Railroads in American Economic Growth: A Report of Some Preliminary Findings," The Journal of Economic History, Cambridge University Press, vol. 22(02), pages 163-197, June.
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    More about this item

    Keywords

    aggregate human capital; public investment; education and research institutions; economic development; endogenous growth; institutions and growth; comparative studies of countries; economic history-education;

    JEL classification:

    • N3 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • I2 - Health, Education, and Welfare - - Education
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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