Human Capital and Industrialization: Evidence from the Age of Enlightenment *

Abstract

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.

The Literary Inquisition: The Persecution of Intellectuals and Human Capital Accumulation in China

“…6 In studying the effects of the literary inquisition on the accumulation of human capital, our findings relate to research on the role institutions have in shaping the incentive to acquire human capital. 7 In particular we build on work that has shown that the 'upper tail' knowledge of educated elites played a crucial role in transmitting the Industrial Revolution (Squicciarini and Voigtländer, 2014). 8 Our results are in line with several studies that have established that the effects of shocks can persist for decades or even centuries, notably Becker and Woessmann (2009) who study the impact of the Reformation on the literacy and income of Protestants in nineteenth century Prussia.…”

“…Human capital and especially upper tail human capital is a crucial ingredient for both innovation and convergence (Squicciarini and Voigtländer, 2014). In Qing China the persecution of intellectuals caused fewer individuals to acquire upper tail human capital.…”

“…7 As discussed by Galor et al (2009);Gallego (2010) and Acemoglu et al (2014). 8 Squicciarini and Voigtländer (2014) build on earlier seminal work by Mokyr (2002Mokyr ( , 2005b. Gennaioli et al (2013) provide evidence that upper tail of the human capital distribution continues to play a crucial role in driving economic growth today.…”

“…A recent paper in economic history that employs this method is Dittmar (2011). Also see Voigtländer and Voth (2012); Squicciarini and Voigtländer (2014).…”

A replication of ‘Education and catch-up in the Industrial Revolution’ (American Economic Journal: Macroeconomics, 2011)

“…No study has been able to show that the positive association between education levels and per capita income in most European economies between 1550 and 1900 reflects a causal effect of education on growth rather than rising incomes enabling people to consume more education. This lack of evidence has led recent literature to focus on the contribution of the knowledge and skills of particular groups (Kelly et al 2014, Squicciarini and Voigtländer 2015, Dittmar and Meisenzahl 2016. One study does claim to provide evidence that education of the general population had an important causal influence on industrialisation in the nineteenth century.…”