Drivers of industrialisation: intersectoral evidence from the Low Countries in the nineteenth century

Philips, Robin C. M. and Földvàri, Péter and Van Leeuwen, Bas (2017): Drivers of industrialisation: intersectoral evidence from the Low Countries in the nineteenth century.

Abstract

In this paper, we trace the causes of regional industrial development in the nineteenth century Low Countries by disentangling the complex relationship between industrialisation, technological progress and human capital formation. We use sectoral differences in the application of technology and human capital as the central elements to explain the rise in employment in the manufacturing sector during the nineteenth century, and our findings suggest a re-interpretation of the deskilling debate. To account for differences among manufacturing sectors, we use population and industrial census data, subdivided according to their present-day manufacturing sector equivalents of the International Standard Industrial Classification (ISIC). Instrumental variable regression analysis revealed that employment in the manufacturing sector was influenced by so-called upper- tail knowledge and not by average educational levels, providing empirical proof of a so-called deskilling industrialisation process. However, we find notable differences between manufacturing sectors. The textiles and clothing sectors show few agglomeration effects and limited use of steam-powered engines, and average education levels cannot adequately explain regional industrialisation. In contrast, the location of the fast- growing and innovative machinery-manufacturing sector was more influenced by technology and the availability of human capital, particularly upper-tail knowledge captured by secondary school attendance rates.

• Item Type: MPRA Paper
• Language: English
• Keywords: industrialization; deskilling; human capital; steam engine; labour; economic growth
• Subjects: J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J24 - Human Capital ; Skills ; Occupational Choice ; Labor Productivity; L - Industrial Organization > L6 - Industry Studies: Manufacturing > L60 - General; N - Economic History > N1 - Macroeconomics and Monetary Economics ; Industrial Structure ; Growth ; Fluctuations > N13 - Europe: Pre-1913; N - Economic History > N6 - Manufacturing and Construction > N63 - Europe: Pre-1913; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O14 - Industrialization ; Manufacturing and Service Industries ; Choice of Technology; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O41 - One, Two, and Multisector Growth Models

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