The Role of Human Capital in Economic Development

Preston Cooper

Advisor: Noel D Johnson, PhD, Department of Economics

Committee Members: Mark Koyama, John Nye

Buchanan Hall, #D180
October 25, 2023, 01:30 PM to 03:30 PM

Abstract:

Economists have long recognized the importance of human capital in economic growth. In this series of papers, I study how various institutions of human capital formation affected economic development in a variety of contexts prior to 1900. These include both formal institutions of human capital formation such as universities and informal institutions such as apprenticeships. 

The first chapter examines the role of European universities during the late Middle Ages and early modern eras, starting with the creation of the University of Bologna in the late 12th century. These “formal” institutions of human capital focused on the teaching of law and supplied the civil service and justice systems of their home cities with trained legists. I find that cities which hosted universities had faster population growth than similar cities without universities, suggesting that universities were associated with higher levels of economic development. 

The second chapter contrasts the formal university with an informal human capital institution—the English apprenticeship. Though England was the cradle of Europe’s industrialization, it had far fewer universities per capita than peer nations on the continent. However, it had a well-developed system of apprenticeship which some scholars have theorized was the main means of human capital incubation and transmission during the Industrial Revolution. English cities with more apprenticeships during the 18th century tended to have a greater degree of labor force specialization in the mid-19th century. 

The final chapter examines the role of the land-grant college system, which was established in the mid-19th century in the United States. In addition to their primary role of providing postsecondary education to students, these institutions added a second channel for the creation of human capital: research to boost the productivity of the nation’s farms. American counties more firmly embedded within the land-grant college network tended to have a better-educated populace and a more specialized labor force; however, counties more exposed to land-grant colleges saw no improvements in agricultural productivity.