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The Role of Human Capital and Innovation in Prussian Economic Development

Francesco Cinnirella () and Jochen Streb

No 4391, CESifo Working Paper Series from CESifo

Abstract: By merging individual data on valuable patents granted in Prussia in the late nineteenth century with county level information on literacy and income tax revenues we show that increases in the stock of human capital not only improved workers’ productivity but also accelerated innovative activities which, in turn, evoked an additional rise in the productivity level. Instrumenting the stock of literate people with information on the number of blind and deaf-mute people we also establish the direct causal effect of human capital on income, net of the innovation channel.

Keywords: human capital; growth; literacy; innovation; patents; Prussia (search for similar items in EconPapers)
JEL-codes: N13 N33 O11 O31 (search for similar items in EconPapers)
Date: 2013
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