Education and Catch-up in the Industrial Revolution †

Research increasingly stresses the role of human capital in modern economic development. Existing historical evidence—mostly from British textile industries—however, rejects that formal education was important for the Industrial Revolution. Our new evidence from tech- nological follower Prussia uses a unique school enrollment and fac- tory employment database linking 334 counties from pre-industrial 1816 to two industrial phases in 1849 and 1882. Using pre-industrial education as instrument for later education and controlling exten- sively for pre-industrial development, we find that basic education is significantly associated with nontextile industrialization in both phases of the Industrial Revolution. Panel data models with county fixed effects confirm the results. (JEL I20, J24, N13, N33, N63)

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