Sources of Upper-Tail Human Capital: Evidence from the Prussian Education Reforms in the Early 19th Century

Coauthors: Konstantin Bakharev, Roman Dimakov, and Margarita Pavlova

How can a nation become a global leader in science and technology? Investment in education can boost human capital, which is crucial for economic development. This project examines whether large-scale education reforms, exemplified by the Prussian education reforms of the early 19th century, can cultivate upper-tail human capital (advanced skills and knowledge). After its defeat by Napoleon, Prussia initiated nation-wide reforms to modernize the state. A core component of these reforms were education reforms that focused on natural sciences and technology. We exploit natural variation in cities’ exposure to the education reforms, comparing Prussian cities affected by the reforms with cities in other German-speaking states that were unaffected. We approximate upper-tail human capital by analyzing the births and deaths of prominent scientists at the city level. Using a Difference-in-Differences empirical framework, we estimate the effects of the reforms on upper-tail human capital formation. Our project contributes to two areas of economic literature: the origins of (upper-tail) human capital and the study of notable individuals. To the best of our knowledge, we are the first to systematically explore the causal impact of national education reforms on upper-tail human capital formation, focusing on Prussia’s experience. This study sheds light on the origins of the highly skilled population that contributed to Germany’s scientific and industrial success in the late 19th century.