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Information Technology and Institutions Supporting Human Capital Accumulation and Exchange

Periodic Reporting for period 3 - INFO TECHNOLOGY (Information Technology and Institutions Supporting Human Capital Accumulation and Exchange)

Reporting period: 2018-05-01 to 2019-10-31

Information technology revolutions transform the production and exchange of ideas and drive profound institutional and cultural change. History provides unique settings to document the causal impact of changes in information technology and institutions, and the best evidence on their long-run effects.

The objective of the research is to document the impact of revolutionary transformations in information technology and institutions using evidence from the European Renaissance. Printing was the new information technology of the Renaissance and is arguably the best parallel to the internet. Print media transmitted ideas that led to significant institutional change. But no quantitative research systematically documents the impact of these innovations.

The research will innovate by constructing ground-breaking micro-data on media markets, human capital, and institutions; developing cutting edge estimators for high-dimensional data to measure ideas in the media; and using historical sources of exogenous variation to identify cause and effect.

The research has three strands. The first will document the impact of competition on idea diffusion and institutional change during the Protestant Reformation. The research will construct firm-level data on all known books in German-speaking Europe 1450-1600, use high-dimensional estimators to measure ideas in print, and identify exogenous variation in competition from archival data.

The second strand will document the origins of persistent differences in human capital accumulation by constructing new data on city laws that set up the first experiments in public education and on virtually all German university students 1400-1550, and by using local shocks to support causal inference.

The third strand will document the impact of organisations supporting knowledge diffusion that were complementary to printing by constructing data on all European scholarly societies and journals and using historical shocks to identify their impact.
The research comprises three strands.

Strand 1 examines the role of competition in media markets in the diffusion of radical ideas and institutional change during the Protestant Reformation.

The completed research has involved construction of novel city-level data on: (1) industrial organization in the printing industry; (2) the content of publications; and (3) institutional changes, including the adoption of laws expanding public goods provision. The data and analysis are presented in a primary scientific research paper that is under revision for publication. Companion research documenting how printing changed the price of storing ideas is also under review.

Strand 2 examines the long- and short-run impacts of institutional shocks to the supply and demand for human capital initiated by the Reformation.

The completed research involved large scale data collection on, including of novel individual-level data on educational achievement and on the occupational and locational choices of highly educated individuals in history. The primary research outputs on this strand to date are two papers. The first paper is “Religious Competition and Reallocation: the Political Economy of the Protestant Reformation.” This paper has been accepted at the Quarterly Journal of Economics. The second paper is “Public Goods Institutions, Human Capital, and Growth: Evidence from German History”, and is under review.

The key objectives of Strand 2 were to construct and analyze these data.

Strand 3 examines the impact of organizations supporting the diffusion of knowledge in European history. The completed research has involved the collection and analysis of data. This research is on-going.
The research advances the research frontier in several ways. First, is the research constructs finely-grained historical microdata – for example on the industrial organization of printing locally, on the content of publications, and on the educational choices of thousands of individual students. A significant novel methodology has been the application of statistical methods for the analysis of high dimensional text data to historical texts. Second, the research uses these data to advance knowledge on fundamental transformations in the European economy using a combination economic and historical methods. Specifically, historical evidence and methods are used to identify sources of variation that enable the researcher to identify cause and effect in some of the more consequential changes in the European economy.