2. Human Capital, Settlers, Institutions, and Economic Growth in Africa, Asia, and
2.8. Conclusion
We have studied the human capital development in 19th century Africa, Asia, and the Americas. Our main methodological tool was the age-heaping method that estimates the share of persons who were able to report their age exactly in years. We combined this new data set with the evidence about settler mortality and long-term economic growth to test systematically the views of the colonial legacy literature. Our results indicate that the evidence supports both the Glaeser et al. (2004) views on human capital growth effects as well as the Acemoglu et al. (2001, 2002) view that settler mortality impacted on the quality of institutions. We went a step further arguing that the human capital of the indigenous population and potential spill-over effects were also very important. In our regressions, another growth factor was idiosyncratic educational differences between the indigenous populations of the countries under study. Some of those countries without substantial European immigration had higher human capital investment early on, whereas others did not. Moreover, we found that the combined effects of European immigration and indigenous human capital development might play a role through spill-over effects even where a relatively small immigrant group was present.
We also suggested a slightly different view of the instrumental variable
‘population density around 1500’. The original interpretation was that population density is an indicator of wealth. Because they were rich, they became victims of European exploitative institutions. However, if the migration of Europeans and their importation of
human capital is the decisive factor in the development of human capital, the overall human capital in densely populated countries such as Mexico, Egypt or India might have remained low because the number of European immigrants was by far outnumbered by the indigenous population. We found in fact that countries such as Egypt and Mexico stagnated in basic numeracy during most of the 18th and late 19th centuries. Apart from institutional and migration factors, this finding might also have been caused by nutritional and health problems in such densely populated countries and by the high inequality between some elite groups and the majority of the population.
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