Working Paper: CEPR ID: DP9991
Authors: Jörg Baten; Kitae Sohn
Abstract: This paper first draws on a unique data set, hojok (household registers), to estimate numeracy levels in Korea from the period 1550?1630. We add evidence from Japan and China from the early modern period until 1800 to obtain a human capital estimate for East Asia. We find that numeracy was high by global standards, even considering the potential sources of upward bias inherent in the data. Therefore, the unusually high level of numeracy in East Asia in the early 21st century was already present in the early modern period. However, East Asia had low national income levels during the 19th and early 20th centuries. We assess this phenomenon in the last section and find that ?Impoverished Numerates?, i.e., countries that were poor despite high early numerical human capital formation, had substantially higher growth rates during the late 20th and early 21st centuries.
Keywords: China; Development; Growth; Human Capital; Japan; Korea; Numeracy
JEL Codes: I21; N30; N35; O15; O40
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Early numeracy in East Asia (specifically Korea, Japan, and China) was high by global standards during 1550-1800 (N25) | human capital formation (J24) |
| Despite high early numeracy, East Asia experienced low national income levels during the 19th and early 20th centuries (N95) | disconnect between human capital and economic growth (O49) |
| Impoverished numerates exhibited higher growth rates (O15) | causal effect of early numeracy on later economic performance (D29) |
| Foundations for human capital-based rapid catch-up growth were laid early in East Asia (O11) | return to growth in the 20th century (N12) |
| Human capital (numeracy) (J24) | GDP growth (O49) |
| Countries with higher human capital formation (O15) | participation in industrialization (O14) |
| China, despite its substantial stock of human capital (J24) | did not experience the same growth (O41) |