MEHR Seminar: Francesco Cinnirella, Ifo Institute for Economic Research, 'Landownership Concentration and the Expansion of Education'

Abstract: Cross-country studies show that high levels of inequality in landownership negatively affect growth-enhancing institutions and human capital formation. Landed elites in agrarian societies oppose mass education and hold the political power necessary to prevent the expansion of schooling. We present evidence from nineteenth-century Prussia showing that the concentration of large landownership is significantly associated with lower levels of primary school enrollment. Prussia is an interesting laboratory given the highly decentralized educational system which granted local landowners ample powers. Using soil texture to identify exogenous variation in the size of land holdings, we find that the negative effect of landownership concentration on schooling is causal. In addition, we find that the adverse effect of landownership concentration diminished substantially in the second half of the nineteenth-century. We suggest that serf labor is the possible mechanism behind the negative relationship; the successive emancipation of peasantry might explain the diminishing effect over time.