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.

A B S T R A C TThis paper shows that governance quality promotes positive net inflows of high-skilled migrants. Home and foreign institutions influence both inflows and outflows, thus determining the net flows of college graduate migrants. Therefore, institutions can affect human capital through migration flows. Our empirical strategy is based on a random utility model from which we derive the net balance of migrants and an exclusion restriction to control for the selection of migrants. We test the predictions of the model using comprehensive matrices of migration by education level and a synthetic indicator of governance quality. We account for endogeneity concerns by means of an instrumental strategy and we disentangle the effect of the quality of domestic and foreign institutions on both inflows and outflows.

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.

This paper studies when religion can hamper diffusion of knowledge and economic development, and through which mechanism. I examine Catholicism in France during the Second Industrial Revolution (1870–1914). In this period, technology became skill-intensive, leading to the introduction of technical education in primary schools. I find that more religious locations had lower economic development after 1870. Schooling appears to be the key mechanism: more religious areas saw a slower adoption of the technical curriculum and a push for religious education. In turn, religious education was negatively associated with industrial development 10 to 15 years later, when schoolchildren entered the labor market. (JEL D83, I21, I26, N33, Z12)