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Human Capital and Industrialization: Evidence from the Age of Enlightenment

Listed author(s):
  • Mara P. Squicciarini
  • Nico Voigtländer

While human capital is a strong predictor of economic development today, its importance for the Industrial Revolution has typically been assessed as minor. To resolve this puzzling contrast, we differentiate average human capital (literacy) from upper-tail knowledge. As a proxy for the historical presence of knowledge elites, we use city-level subscriptions to the famous Encyclopédie in mid-18th century France. We show that subscriber density is a strong predictor of city growth after the onset of French industrialization. Alternative measures of development such as soldier height, disposable income, and industrial activity confirm this pattern. Initial literacy levels, on the other hand, are associated with development in the cross-section, but they do not predict growth. Finally, by joining data on British patents with a large French firm survey from the 1840s, we shed light on the mechanism: upper-tail knowledge raised productivity in innovative industrial technology.

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File URL: http://www.nber.org/papers/w20219.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 20219.

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Date of creation: Jun 2014
Publication status: published as Mara P. Squicciarini & Nico Voigtländer, 2015. "Human Capital and Industrialization: Evidence from the Age of Enlightenment," The Quarterly Journal of Economics, vol 130(4), pages 1825-1883.
Handle: RePEc:nbr:nberwo:20219
Note: DAE EFG
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