EconPapers    
Economics at your fingertips  
 

Is Industrialization Conducive to Long-Run Prosperity?

Raphael Franck () and Oded Galor ()

No 9158, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This research explores the long-run effect of industrialization on the process of development. In contrast to conventional wisdom that views industrial development as a catalyst for economic growth, the study establishes that while the adoption of industrial technology was conducive to economic development in the short-run, it has had a detrimental effect on standards of living in the long-run. Exploiting exogenous source of regional variation in the adoption of steam engines during the French industrial revolution, the research establishes that regions in which industrialization was more intensive experienced an increase in literacy rates more swiftly and generated higher income per capita in the subsequent decades. Nevertheless, intensive industrialization has had an adverse effect on income per capita, employment and equality by the turn of the 21st century. This adverse effect reflects neither higher unionization and wage rates nor trade protection, but rather underinvestment in human capital and lower employment in skilled-intensive occupations. These findings suggest that the characteristics that permitted the onset of industrialization, rather than the adoption of industrial technology per se, have been the source of prosperity among the currently developed economies that experienced an early industrialization.

Keywords: economic growth; industrialization; steam engine (search for similar items in EconPapers)
JEL-codes: N33 N34 O14 O33 (search for similar items in EconPapers)
Pages: 83 pages
Date: 2015-06
New Economics Papers: this item is included in nep-cse, nep-evo, nep-gro, nep-his and nep-pke
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed

Downloads: (external link)
https://docs.iza.org/dp9158.pdf (application/pdf)

Related works:
Working Paper: Is Industrialization Conducive to Long-Run Prosperity? (2015) Downloads
Working Paper: Is Industrialization Conducive to Long-Run Prosperity? (2015) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp9158

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().

 
Page updated 2022-01-16
Handle: RePEc:iza:izadps:dp9158