A story of large landowners and math skills: Inequality and human capital formation in long-run development, 1820ヨ2000

Baten, Joerg, and Juif, Dácil—A story of large landowners and math skills: Inequality and human capital formation in long-run development, 1820–2000 We create a new dataset to test the influence of land inequality on long-run human capital formation in a global cross-country study and assess the importance of land inequality relative to income inequality. Our results show that early land inequality has a detrimental influence on math and science skills even a century later. We find that this influence is causal, using an instrumental variable (IV) approach with geological, climatic and other variables that are intrinsically exogenous. A second major contribution of our study is our assessment of the persistence of numerical cognitive skills, which are an important component of modern human capital measures. Early numeracy around 1820 is estimated using the age-heaping strategy. We argue that countries with early investments in numerical education entered a path-dependency of human capital-intensive industries, including skill-intensive agriculture and services. The combined long-run effects of land inequality and human capital path-dependence are assessed for the first time in this article. Journal of Comparative Economics xxx (xx) (2013) xxx–xxx. University of Tübingen, CESifo, Melanchthonstraße 30, 72074 Tübingen, Germany; University of Tübingen, Melanchthonstraße 30, 72074 Tübingen, Germany. 2013 Association for Comparative Economic Studies Published by Elsevier Inc. All rights reserved.