Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/114040 
Year of Publication: 
2015
Series/Report no.: 
IZA Discussion Papers No. 9158
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
This research explores the long-run effect of industrialization on the process of development. In contrast to conventional wisdom that views industrial development as a catalyst for economic growth, the study establishes that while the adoption of industrial technology was conducive to economic development in the short-run, it has had a detrimental effect on standards of living in the long-run. Exploiting exogenous source of regional variation in the adoption of steam engines during the French industrial revolution, the research establishes that regions in which industrialization was more intensive experienced an increase in literacy rates more swiftly and generated higher income per capita in the subsequent decades. Nevertheless, intensive industrialization has had an adverse effect on income per capita, employment and equality by the turn of the 21st century. This adverse effect reflects neither higher unionization and wage rates nor trade protection, but rather underinvestment in human capital and lower employment in skilled-intensive occupations. These findings suggest that the characteristics that permitted the onset of industrialization, rather than the adoption of industrial technology per se, have been the source of prosperity among the currently developed economies that experienced an early industrialization.
Subjects: 
economic growth
industrialization
steam engine
JEL: 
N33
N34
O14
O33
Document Type: 
Working Paper

Files in This Item:
File
Size
2.15 MB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.