Ewout Frankema (Rural and Environmental History, Wageningen University) The Great Convergence. Skill Accumulation and Mass Education in Africa and Asia, 1870-present

While human capital has gained prominence in endogenous growth theory, economists have struggled to demonstrate the positive externalities of the spread of mass education in developing economies. We shed new light on the economic significance of the global schooling revolution by drawing attention to a structural transformation in labor markets over the long twentieth century: a dramatic fall in wage premiums for basic and medium skilled workers. Exploring a newly constructed wage dataset of blue- and white-collar workers in Africa and Asia between 1870-2010 reveals that skill-premiums in those regions have rapidly converged to levels earlier seen in the industrialized world. While not being a sufficient condition for Schumpeterian growth, the expanded availability of affordable skills is a necessary condition for Smithian growth. The great convergence in skill premiums sheds a more optimistic light on the long-term gains of mass education in the global South than standard growth regressions have hitherto done.