Human Capital, Unequal Opportunities, and Productivity Convergence: A Global Historical Perspective, 1800–2100

This paper constructs a new global historical database on public expenditure and revenue and their components—particularly education and health expenditure—covering all world regions over the 1800-2025 period. We document a large rise of human capital expenditure (as % of GDP) in all parts of the world in the long run, but with enormous and persistent inequality between regions. Public education expenditure per school-age individual in Sub-Saharan Africa is about 3% of the level observed in Europe and North America in 2025 in PPP terms (versus 6% in 1980 and 4% in 1950). We also find a large impact of human capital expenditure on productivity growth over the 1800–2025 period, especially for public education and for poor countries. Estimated returns using our macro-historical database are around 10% or more, in line with micro studies. Finally, we present simulations based on alternative human capital expenditure trajectories over the 2025–2100 period. In particular, we analyze the conditions under which convergence in human capital expenditure could lead to global productivity convergence by 2100 (around 100€ per hour in all regions in our benchmark scenario). (Stone Center on Socio-Economic Inequality Working Paper)