Does Education Fuel Economic Growth?

Over the last decade, a huge database about the lives of southwest German villagers between 1600 and 1900 has been compiled by a team led by Professor Sheilagh Ogilvie at Cambridge University’s Faculty of Economics. It includes court records, guild ledgers, parish registers, village censuses, tax lists and – the most recent addition – 9,000 handwritten inventories listing over a million personal possessions belonging to ordinary women and men across three centuries. Ogilvie, who discovered the inventories in the archives of two German communities 30 years ago, believes they may hold the answer to a conundrum that has long puzzled economists: the lack of evidence for a causal link between education and a country’s economic growth. As Ogilvie explains, ‘Education helps us to work more productively, invent better technology, and earn more … surely it must be critical for economic growth? But, if you look back through history, there’s no evidence that having a high literacy rate made a country industrialise earlier.’ Between 1600 and 1900, England had only mediocre literacy rates by European standards, yet its economy grew fast and it was the first country to industrialise. During this period, Germany and Scandinavia had excellent literacy rates, but their economies grew slowly and they industrialised late. ‘Modern cross-country analyses have also struggled to find evidence that education causes economic growth, even though there is plenty of evidence that growth increases education,’ she adds. In the handwritten inventories that Ogilvie is analysing are the belongings of…