Colonial Institutions, Trade Shocks, and the Diffusion of Elementary Education in Brazil, 1889–1930

Abstract

In this paper, we examine the role of trade shocks in promoting the diffusion of elementary education in subnational units in Brazil during a period in which they had relative financial autonomy to collect export taxes and spend on public goods. The argument is that trade shocks affect asymetrically the tax revenues of state governments and, thus, their expenditures on elementary education per capita according to what crop mix they had. We then show that states with more egalitarian and democratic institutions use positive trade shocks to invest in education, while the opposite takes place in states with less democratic institutions (e.g., in states that had more slaves). We also show using OLS and instrumental variables that positive trade shocks increased expenditures on education per capita and led to higher literacy rates and to more schools per children. The resulting distribution of human capital across states persists until today.

Immigration and the path dependence of education: the case of German‐speakers in São Paulo, Brazil (1840–1920)

“…Carvalho Filho and Colistete, ‘Education performance’; Carvalho Filho and Monasterio, ‘Immigration’; Musacchio, Fritscher, and Viarengo, ‘Colonial institutions’; Rocha, Ferraz, and Soares, ‘Human capital’; Stolz, Baten, and Botelho, ‘Growth effects’.…”

The legacies of slavery in and out of Africa

“…In the latifundia system based on slave labor, landlords historically had no incentive to develop mass educational institutions, and this attitude persisted even after abolition in 1888, with consequences still visible today. Similarly, Musacchio et al (2014) show that over the 1889-1930 period Brazilian states with a lower intensity of slavery were able to exploit positive trade shocks and invest the resulting export tax revenues in elementary education expenditures. The opposite occurs in states with more slaves.…”

Slavery, racial inequality, and education

“…An opposite, negative effect on education is observed instead, under the same circumstances, in states with more slaves. The resulting distribution of human capital across states in Brazil persists to the present day [8].…”