DP14138 | The Wheels of Change: Human Capital, Millwrights, and Industrialization in Eighteenth-Century England

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Measures of human capital correlate strongly with technological change and economic growth across regions. However, the endogeneity of these measures complicated this interpretation. This paper aims to identify the causal effect of human capital in the context of Britain’s industrialization in the eighteenth century, by uncovering the geographical origins of its highly skilled mechanical labor. We achieve this by exploiting the persistent effect of the spatial location of early medieval watermills across England (as registered in Domesday Book in 1086) on the spatial distribution of a specific group of mechanical workmen known as wrights, who specialized in building watermills, and using the exogenous source of cross-district variation in geographical suitability for the construction of watermills in the early medieval period, to instrument for the availability of wrights in the first half of the eighteenth century (1710-50). In the case of England, the mechanical skills that evolved in response to the extensive adoption of watermills for grinding in the early middle ages, were complementary to technological change and turned out to be an important power behind England’s leadership in the second half of the eighteenth century.