The Role of Education and Skill
in the British Industrial Revolution
Human capital has featured prominently in studies of twentieth century economic growth. Thus, Denison ( 1962) concluded that for the United States between 1910 and 1960, 23 percent of the annual growth of output could be accounted for by improvements in the educational attainment of the labor force. Numerous cross country studies using observations from the second half of the twentieth century have found that measures of human capital investment have statistically significant effects on rates of output growth (for a brief overview of these studies see Tallman and Wang, 1992, p.8). In contrast, the prevailing view of the British Industrial Revolution has downplayed the contribution of human capital ( Sanderson, 1972a; 1995; Schofield, 1973). The basic reasons for this are the consistent findings of educational stagnation in England during the Industrial Revolution period and findings that in key expanding sectors of the British economy, such as cotton textiles, educational levels were actually declining. This latter result is reinforced by analysis which suggests that formal education had little role to play in most parts of the manufacturing labor force.
Recent work, however, has pointed to rethinking the role that education played in the Industrial Revolution. Thus, on the one hand, Crafts ( 1995a) in an analysis of the implications of recent growth theory for reassessing the Industrial Revolution argues that a simple broadening of the notion of capital to include human capital is not a promising avenue for understanding why Britain was the first country to experience rapid industrialization. But on the other hand, he does suggest that a consideration of more indirect effects of human capital through affecting rates of technical change may be a quite fruitful direction of research albeit requiring further examination of the nature of human capital.
These contrasting findings between Industrial Revolution Britain and late twentieth century cross-country variations in rates of economic growth suggest the following questions. First, how sensitive is the claim that educational stagnation prevailed in Britain during its Industrial Revolution and that the contribution of