Working Paper: NBER ID: w20219
Authors: Mara P. Squicciarini; Nico Voigtländer
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.
Keywords: human capital; industrialization; Enlightenment; knowledge elites
JEL Codes: J24; N13; O14; O41
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| knowledge elites (O36) | city growth (R11) |
| subscriber density (J11) | productivity in innovative industrial technology (O39) |
| scientific societies (F53) | subscriber density (J11) |
| literacy levels (I21) | city growth (R11) |
| subscriber density (J11) | city growth (R11) |