Technology-Skill Complementarity in the Early Phase of Industrialization ∗ Rapha¨elFrancky and Oded Galorz This Version: February 7th, 2017 Abstract The research explores the effect of industrialization on human capital formation. Ex- ploiting exogenous regional variations in the adoption of steam engines across France, the study establishes that, in contrast to conventional wisdom that views early industri- alization as a predominantly deskilling process, the industrial revolution was conducive for human capital formation, generating broad increases in literacy rates and educa- tional attainment. Keywords: Technology-Skill Complementarity, Economic Growth, Industrialization, Human Capital, Steam Engine. JEL classification: N33, N34, O14, O33. ∗We thank Mario Carillo, Pedro Dal Bo, Martin Fiszbein, Gregory Casey, Marc Klemp, Stelios Michalopoulos, Natacha Postel-Vinay, Assaf Sarid, Yannay Spitzer and David Weil for helpful comments and discussions. We thank Guillaume Daudin, Alan Fernihough, Omer¨ Ozak¨ and Nico Voigtl¨anderfor sharing their data with us. yThe Hebrew University of Jerusalem, Department of Economics, Mount Scopus, Jerusalem 91905, Israel.
[email protected] zHerbert H. Goldberger Professor of Economics, Brown University, Department of Economics, 64 Waterman St, Providence RI 02912 USA. Oded
[email protected]. 1 Introduction While it is widely recognized that technology-skill complementarity has characterized the nature of technology in advanced stages of development (Goldin and Katz, 1998), the predominant view