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Global Contacts, Numeracy and Human Capital: The Effects of Trade and Migration

This session will discuss the important effects of global contacts on human-capital formation. Given that, for many countries of the world, no comprehensive statistics on specific human capital components are available, this session will use the age-heaping-based numeracy estimates as well as other indicators of human capital. We will focus, in particular, on the effects that trade and migration had on its formation. Migration potentially results in brain drain effects, if the more educated people leave the country. Alternatively, numerical brain gain can occur, if the opposite is the case, as happened to a number of European countries in the mid-19th century. The human capital effects on the target country are given by the difference between the human capital of the migrant and the population of the destination country. Until today, there are heated debates about these effects of global contacts.
Another component of internationalization results from trade, especially in the periods of globalization. In the late 19th and late 20th centuries trade shares increased dramatically, and this had a number of interesting effects on human capital formation and numeracy in particular.
For example, the increasing trade with cash crops in poor countries yielded higher incomes, which usually resulted in higher educational investments. However, sometimes there were important side effects, such as increasing inequality, which resulted in higher educational inequality. Similarly, in this session, the effects on the countries which imported food will be considered, because in many industrial economies food crops were particularly scarce, and this had important consequences for the ability to learn and to acquire human capital. Likewise, international trade also resulted in resource-curse effects if the country was primarily exporting mining products or other primary goods, which often did not have such a strong learning-by-doing effect.
All these components will be addressed for a large number of countries for which new evidence on numeracy and human capital has only recently become available and provides substantial insights into understanding their long run development.

Organizer(s)

  • Joerg Baten University of Tuebingen joerg.baten@uni-tuebingen.de
  • Gabriele Cappelli Universitat Autònoma de Barcelona gabriele.cappelli@eui.eu

Session members

  • Jean-Pascal Bassino, University of Lyon
  • Alexandra de Pleijt, University of Oxford
  • María Fernández-Moya, CUNEF
  • Caterina Moschieri, IE Business School
  • Thomas Keywood, University of Tuebingen
  • María del Carmen Pérez Artés, University of Tuebingen
  • Michelangelo Vasta, University of Siena
  • Bruno Witzel da Souza, University of Goettingen
  • Joerg Baten, University of Tuebingen
  • Gabriele Cappelli, Universitat Autònoma de Barcelona

Discussant(s)

  • TBC

Papers

Panel abstract

This session will discuss the important effects of global contacts on human-capital formation. Given that, for many countries of the world, no comprehensive statistics on specific human capital components are available, this session will use the age-heaping-based numeracy estimates as well as other indicators of human capital. We will focus, in particular, on the effects that trade and migration had on its formation. The session will deal with the impact of migrations on human-capital accumulation, exploring whether brain-drain or brain-gain effects dominate in the source country, and whether inward migration prompts a more rapid growth of skills in the receiving countries. As far as trade is concerned, the session will explore the impact of e.g. cash crops on the rise of education and educational inequality.

1st half

Introduction to the session

Gabriele Cappelli (Universitat Autònoma de Barcelona)

Girl-power Generates Superstars in Long-term Development: Female Autonomy and Human Capital Formation in Early Modern Europe

Joerg Baten (University of Tuebingen, CESifo and CEPR), Alexandra M. de Pleijt (University of Oxford)

Many countries did not accumulate sufficient human capital to be successful in international comparison, because they did not make use of the potential of the female half of their population. Other countries did the opposite and became “superstars” and pioneers in long-term economic development. This finding arises from studying female autonomy and numeracy indicators for 27 countries between 1500 and 1900. We approach endogeneity issues exploiting exogenous variation in gender-biased agricultural specialization.

Many countries did not accumulate sufficient human capital to be successful in international comparison, because they did not make use of the potential of the female half of their population. Other countries did the opposite and became “superstars” and pioneers in long-term economic development. This finding arises from studying female autonomy and numeracy indicators for 27 countries between 1500 and 1900. We approach endogeneity issues exploiting exogenous variation in gender-biased agricultural specialization.

A Curse of ‘Point Source’ Resources? Cash Crops and Numeracy in the Philippines, 19th-20th Century

Jean-Pascal Bassino (University of Lyon)

In a panel regression analysis of the Philippine provinces and birth decades, we study whether the cash-crop agriculture had negative effects on numeracy. We expected a problematic situation in sugar plantation provinces. However, the result was a very differentiated picture. In the “sugar provinces”, the coefficient changed from very large and negative during the pre-expansion phase to only large and negative in the expansion phase (relative to other rural districts without substantial cash-crop expansion). Abacá provinces were never much different from the constant. However, the cash-crop economy of sugar changed the population structure of the Philippines substantially: the sugar provinces experienced massive immigration and population growth. Hence a modest negative effect on Philippine national numeracy averages could have been caused by the increase of the population share in low-numeracy sugar provinces.

In a panel regression analysis of the Philippine provinces and birth decades, we study whether the cash-crop agriculture had negative effects on numeracy. We expected a problematic situation in sugar plantation provinces. However, the result was a very differentiated picture. In the “sugar provinces”, the coefficient changed from very large and negative during the pre-expansion phase to only large and negative in the expansion phase (relative to other rural districts without substantial cash-crop expansion). Abacá provinces were never much different from the constant. However, the cash-crop economy of sugar changed the population structure of the Philippines substantially: the sugar provinces experienced massive immigration and population growth. Hence a modest negative effect on Philippine national numeracy averages could have been caused by the increase of the population share in low-numeracy sugar provinces.

Elite human capital in the very long run: Spain and the Mediterranean, 500 CE to 1900 CE

María del Carmen Pérez Artés (University of Tuebingen)

In this study, we trace elite numeracy for the period from 500 CE to 1900 CE. As a proxy indicator, we consider the share of rulers for which a birth year is known. We evaluate the validity of this indicator carefully and assess potential selectivity in our evidence. We find that in Spain, Muslim rulers initially had higher levels of numeracy, but there was a switch during the early Medieval Period when numeracy among Muslim rulers declined while increasing among Christian rulers. This change preceded the major events surrounding the Spanish Reconquista. We observe similar patterns for the wider geographic regions of North Africa and the European Mediterranean: For example, Egypt and Algeria had a very remarkable level of elite numeracy in earlier periods, but in the late Medieval and early Modern Period they experienced a substantial decline. We assess conflict, urban growth and religious thought as potential determinants.

In this study, we trace elite numeracy for the period from 500 CE to 1900 CE. As a proxy indicator, we consider the share of rulers for which a birth year is known. We evaluate the validity of this indicator carefully and assess potential selectivity in our evidence. We find that in Spain, Muslim rulers initially had higher levels of numeracy, but there was a switch during the early Medieval Period when numeracy among Muslim rulers declined while increasing among Christian rulers. This change preceded the major events surrounding the Spanish Reconquista. We observe similar patterns for the wider geographic regions of North Africa and the European Mediterranean: For example, Egypt and Algeria had a very remarkable level of elite numeracy in earlier periods, but in the late Medieval and early Modern Period they experienced a substantial decline. We assess conflict, urban growth and religious thought as potential determinants.

Assessing the Impact of Violence on Long Run Human Capital Formation among European Elites

Thomas Keywood (University of Tuebingen)

We employ a new composite indicator for what we term ‘elite human capital’ in order to investigate the impact of violence on human capital formation across Europe since the Early Medieval Period. Additionally, we use a modified version of Eisner's (2011) regicide indicator – calculating the proportion of murdered rulers – in order to estimate violence over this time span; as homicide statistics were not recorded for a wide panel of countries until the 19th century. After controlling for additional potential determinants, we find evidence that violence had a detrimental impact on human capital formation and partially attribute the drastic increase in human capital since the High Middle Ages to declining violence.

We employ a new composite indicator for what we term ‘elite human capital’ in order to investigate the impact of violence on human capital formation across Europe since the Early Medieval Period. Additionally, we use a modified version of Eisner's (2011) regicide indicator – calculating the proportion of murdered rulers – in order to estimate violence over this time span; as homicide statistics were not recorded for a wide panel of countries until the 19th century. After controlling for additional potential determinants, we find evidence that violence had a detrimental impact on human capital formation and partially attribute the drastic increase in human capital since the High Middle Ages to declining violence.

2nd half

How did education policy shape the race towards mass education? A comparative project based on France, Italy, Spain and Sweden, c. 1840–1940

Gabriele Cappelli (Universitat Autònoma de Barcelona), Johannes Westberg (Örebro University)

International differences in school systems are an issue that is discussed intensively. Through a combination of econometric and local case studies we will explore the mechanisms that stimulated or hindered the expansion of mass schooling between 1840 and 1940. National and regional variations in France, Italy, Spain and Sweden will be explored quantitatively, while the case studies, which are mainly devoted to the development of schooling in three Swedish counties, will explore the cultural context behind the correlations and causal relations that the international study identifies. This paper outlines the design of this project, presents our dataset and some preliminary results. We can describe trends in school funding and enrolments, and how these varied both between countries and across regions. The significant regional differences in the rise of mass schooling will consequently be highlighted and discussed in relation to factors such as fiscal capacity, political voice and level of decentralization.

International differences in school systems are an issue that is discussed intensively. Through a combination of econometric and local case studies we will explore the mechanisms that stimulated or hindered the expansion of mass schooling between 1840 and 1940. National and regional variations in France, Italy, Spain and Sweden will be explored quantitatively, while the case studies, which are mainly devoted to the development of schooling in three Swedish counties, will explore the cultural context behind the correlations and causal relations that the international study identifies. This paper outlines the design of this project, presents our dataset and some preliminary results. We can describe trends in school funding and enrolments, and how these varied both between countries and across regions. The significant regional differences in the rise of mass schooling will consequently be highlighted and discussed in relation to factors such as fiscal capacity, political voice and level of decentralization.

Hans, João, or Giovanni? Nationality- and policy-specificities in the determinants of immigration to São Paulo, Brazil (1820-1920)

Bruno Gabriel Witzel de Souza, University of Goettingen

We study the determinants of immigration to the province/state of São Paulo, Brazil. We first discuss an oscillating immigration policy that focused on contract laborers and rural settlers. To these, we add the cases of immigrants for public works and spontaneous immigrants. We then ask about the empirical determinants of immigration for municipalities in the 1870s and for a sample of settlement colonies in the period 1898-1920 that includes all registered immigrants. We study the heterogeneity of the determinants over time and across types of immigrants and nationalities – reflecting selectivity and the position of the sending nation in its emigration life cycle. We found a persistent impact of cultural proximity and time- and nationality-varying selectivity on sector composition. Economic determinants were important to explain immigration to municipalities in the 1870s, but did not have a sufficient variation to determine the number of most nationalities in settlement colonies.

We study the determinants of immigration to the province/state of São Paulo, Brazil. We first discuss an oscillating immigration policy that focused on contract laborers and rural settlers. To these, we add the cases of immigrants for public works and spontaneous immigrants. We then ask about the empirical determinants of immigration for municipalities in the 1870s and for a sample of settlement colonies in the period 1898-1920 that includes all registered immigrants. We study the heterogeneity of the determinants over time and across types of immigrants and nationalities – reflecting selectivity and the position of the sending nation in its emigration life cycle. We found a persistent impact of cultural proximity and time- and nationality-varying selectivity on sector composition. Economic determinants were important to explain immigration to municipalities in the 1870s, but did not have a sufficient variation to determine the number of most nationalities in settlement colonies.

The determinants of the human-capital gender gap in Italy, 1861 - 1921

Gabriele Cappelli (Universitat Autònoma de Barcelona), Michelangelo Vasta (University of Siena)

This paper explores the determinants of the human-capital gender gap in Italy in the late Liberal Age (1911 – 1921). We rely on a brand-new, cross-section micro dataset of literacy rates in 1911 and 1921 as well as their potential determinants around 1911, based on a fully representative 10-percent sample of all Italian municipalities (N=1074). First, we investigate which factors correlate with the rate of growth of literacy during the period considered. Secondly, we test the hypothesis that the shift towards centralized primary education in 1911 (the Daneo-Credaro Reform) prompted more rapid human capital accumulation by reducing the gender gap in literacy, an issue that has not yet been explored.

This paper explores the determinants of the human-capital gender gap in Italy in the late Liberal Age (1911 – 1921). We rely on a brand-new, cross-section micro dataset of literacy rates in 1911 and 1921 as well as their potential determinants around 1911, based on a fully representative 10-percent sample of all Italian municipalities (N=1074). First, we investigate which factors correlate with the rate of growth of literacy during the period considered. Secondly, we test the hypothesis that the shift towards centralized primary education in 1911 (the Daneo-Credaro Reform) prompted more rapid human capital accumulation by reducing the gender gap in literacy, an issue that has not yet been explored.

The Role of Immigration on Firm International Performance. Evidence From 60 Years Of Émigrés and Investments from Spain into Mexico

María Fernández-Moya (CUNEF), Caterina Moschieri (IE Business School)

Our research illustrates the evolution of Spanish publishing firms in Mexico and their response to major historical events both in their home and in the host country. Our analyses allow us to trace over time how firms —by acting in a particular historically embedded context—leveraged the Spanish émigrés in Mexico to wedge and strengthen their operations in the country. Although during the period 1939-1977, Mexico was the only Latin American country with no official relations with Spain, it became the most important destination of Spanish publishing firms’ exports. Our study reveals the role played by Spanish émigrés, who facilitated and allowed the Spanish firms’ expansion despite the difficult economic and institutional context. Specifically, our analyses reveal that from 1939 to 1998, Spanish émigrés in Mexico helped publishing firms modify their operations from exports, to local productions through subsidiaries, and then onto acquisitions that consolidated the industry.

Our research illustrates the evolution of Spanish publishing firms in Mexico and their response to major historical events both in their home and in the host country. Our analyses allow us to trace over time how firms —by acting in a particular historically embedded context—leveraged the Spanish émigrés in Mexico to wedge and strengthen their operations in the country. Although during the period 1939-1977, Mexico was the only Latin American country with no official relations with Spain, it became the most important destination of Spanish publishing firms’ exports. Our study reveals the role played by Spanish émigrés, who facilitated and allowed the Spanish firms’ expansion despite the difficult economic and institutional context. Specifically, our analyses reveal that from 1939 to 1998, Spanish émigrés in Mexico helped publishing firms modify their operations from exports, to local productions through subsidiaries, and then onto acquisitions that consolidated the industry.

Concluding remarks

Joerg Baten (University of Tuebingen, CESifo and CEPR)